MTD to affect 4% of UK businesses only?

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Standing out from the crowd

The official VAT statistics (thanks Mark Purdue) show that there are 1.2m VAT registered businesses with turnover above the registration threshold. Looking at this in conjunction with other official stats, my calculated guess is that the 1.2m includes 1m limited companies.

In my experience, limited companies and VAT-registered businesses generally are much more likely to use accounting software or, at the very least, Excel. So the percentage of the 1.2m for whom MTD is going to require a change of record keeping system must be pretty low - 20% at most?

So, (stay with me here) if 20% of 1.2m = 240,000 and the total UK business population is 5.5m then MTD, as it is now proposed, will require maybe 4% of UK businesses to switch from non-digital records.

Anyone want to sense-check that logic? :)

About Adrian Pearson

Replies (4)

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By Mark Purdue
31st Jul 2017 08:56

Hi Adrian,

On the face of it, I would agree with your estimates. However, one area to consider are those software users who currently submit their VAT data via the government gateway, which I am guessing are primarily the spreadsheet users.

I assume that HMRC's push to "MTD for VAT" will mean that the VAT submissions to HMRC will be done via the new API's, rather than the existing gateway, suggesting a "VAT submission solution" of some description will be needed for this category of business.

Many thanks

Mark Purdue
Product Manager
Thomson Reuters

Thanks (2)
Replying to MarkP:
By SM80
17th Aug 2017 07:20

Just out of curiosity, has HMRC told you yet what the plan is? Your post seemed to imply not (at the time of posting).

Thanks (0)
Replying to SM80:
By Mark Purdue
17th Aug 2017 10:25

Not directly, no. However, the 'ethos' of MTD is that data is provided via API and software, rather than the Government Gateway.

With income tax quarterly reporting, HMRC had to show there were suitable products widely available before looking to remove the gateway - I assume the same will apply here. i.e. HMRC will want to go along the API route, but have to ensure there are suitable VAT products that meet businesses needs.

Thanks (0)
By raju m
20th Aug 2017 21:54

What is API? Apology for my ignorance.

Thanks (0)

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