Following the recent Making Tax Digital (MTD) changes announced in the Autumn Statement, a critical report from the Public Accounts Committee (PAC) sheds light on concerns about the program’s costs, delays, and its potential to ‘make tax difficult.’
In response to these concerns, Dame Meg Hillier, committee chair, expressed worry about HMRC’s failure to prioritize taxpayers’ needs, stating, “seven years and £640m into the Making Tax Digital program, we are concerned HMRC is also succeeding in making tax difficult.”
Key Highlights from the Report:
Costs and Delays: The PAC report outlines failures in planning, design, and delivery, leading to substantial costs and delays in the MTD program.
Additional Burdens on Taxpayers: Despite initial aims to reduce the burden on taxpayers, the report highlights concerns about increased costs and demands on self-assessment taxpayers, including expenses for third-party software and quarterly tax returns.
Lack of Transparency: The report accuses HMRC of not being transparent about the additional software and training costs imposed on taxpayers. The exclusion of projected costs, totaling over £2bn, raises concerns about future transparency.
Poor Planning: The report points out “widespread and repeated failures” in HMRC’s planning, design, and delivery of MTD, expressing little confidence in HMRC’s ability to deliver the program on time.
Limited Participation: Despite an initial aim to pilot the program with 15,500 participants, the report notes that by 2023, only 137 participants were involved, indicating a lack of adequate testing.
Looking Ahead:
Despite these challenges, HMRC has set a target of April 2025 for a near-unrestricted voluntary pilot, leaving little time for addressing design choices and technical solutions.
The PAC report emphasizes the need for a realistic plan and timetable, urging HMRC to prioritize certainty, honesty, and transparency to regain stakeholders’ confidence. Stay tuned for further developments on this critical issue.
