The average cost of implementing Making Tax Digital for VAT is estimated at £411, while digital reporting has reduced the number of errors, according to the latest user research from HMRC
The HRMC user research into Making Tax Digital (MTD) for VAT found that the average total transitional cost for businesses that reported them was £411, equating to £65 across all businesses.
However, businesses also reported ongoing costs of compliance. The average total ongoing cost per quarter for businesses that reported them was £172, equating to £49 across all businesses. For a whole year the reported costs were estimated at £680, although use of software should have reduced the number of hours spent managing VAT payments.
The largest ongoing cost was increasing use of existing bookkeepers or agents (£233 on average per quarter). The ongoing cost of a new software package was on average £87 per quarter for those businesses that reported it.
