Why is MTD being introduced?
Different explanations have been given in different forums, however, the most likely driver for MTD is to recover more tax – the so called “Tax gap”. HMRC also explain that having digital records will make businesses more efficient and they are probably right. However, that is likely to be at the cost of shorter term problems as anyone who has implemented a new system will testify.
Several other countries have already successfully introduced systems that go further than MTD. For instance, Italy, Greece, Spain and Hungary all require invoices to be sent electronically to them at the same time that they are raised and there are similar set ups in Turkey and Latin America.
It is therefore hard to argue, as some do, that MTD will never work.