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Vat

Treasury written question – answered on 14th November 2018.

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Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

To ask Her Majesty's Government how many small businesses participate in the VAT Flat-Rate Scheme.

Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

To ask Her Majesty's Government whether they conducted an equality impact assessment on the decision to apply Making Tax Digital to small businesses paying VAT using the VAT Flat-Rate Scheme; and if so, whether they will publish that assessment.

Photo of Lord Harris of Haringey Lord Harris of Haringey Labour

To ask Her Majesty's Government which commercial software available to small businesses using the VAT Flat-Rate Scheme are compliant with Making Tax Digital; and what are the costs of such software to those small businesses.

Photo of Lord Bates Lord Bates The Minister of State, Department for International Development

The latest published statistics show that in the last year for which figures are available (2016-17), there were 358,270 businesses operating the VAT Flat Rate Scheme (FRS).

There is no separate impact assessment relating to businesses participating in the FRS. An overall Impact Assessment was published on 1 December 2017.

MTD is intended to help businesses meet their tax obligations as simply as possible, regardless of whether they operate standard or specialist schemes. While HM Revenue and Customs (HMRC) cannot recommend specific software products, they have published details of compatible software on GOV.uk.

This will be updated regularly as more MTD software products become available. HMRC has also published guidance within its recent VAT Notice 7/22 on GOV.UK on how to account for the FRS on software that does not have it as a feature.

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