UK Inquiry Tracker

Progress with making tax digital

Public Accounts Committee Closed Inquiry

Opened: 16 May 2023 Closed: 8 Mar 2024 Parliament page

Making Tax Digital (MTD) is HMRC’s flagship transformation programme. It aims to help businesses reduce errors in their tax records, through the use of digital record-keeping and by requiring them to submit quarterly updates using MTD compatible software. HMRC also intends to move processes and tax records onto a modern … Read more

33 Conclusions

1 Report

1 Oral session

1 Letter

1 Event

Activity timeline 5 events

8 Mar
2024

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Eightieth report from Session 2022-23

24 Nov
2023

Report published

Eightieth Report - Progress with Making Tax Digital

3 Jul
2023

Correspondence

Correspondence from Jim Harra, Permanent Secretary and Chief Executive, HM Revenue and Customs to PAC Chair Dame Meg Hillier – re Tax-deduc…

19 Jun
2023

Oral evidence

Progress with making tax digital

19 Jun
2023

Formal meeting (oral evidence session) · The Grimond Room, Portcullis House

Progress with making tax digital

Oral evidence sessions 1 session

19 Jun 2023

View on parliament.uk

Progress with making tax digital

Jim Harra CB · HM Revenue and Customs Jonathan Athow · HMRC Jo Rowland · HM Revenue and Customs

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Eightieth Report - Progress with Making Tax Digital	HC 1333	24 Nov 2023	33	Responded

Recommendations & Conclusions

3 results

30 Conclusion Acknowledged

Eightieth Report - Progress with M…

Repeated delays to Making Tax Digital programme undermine software provider confidence and investment

We asked the Department if it accepted that the changing timeline of the programme undermined those who were developing a business around the requirements of the programme. HMRC recognised that the repeated delays to the programme’s delivery had been unwelcome … Read more

Government Response

The government agrees with the conclusion, recognising the importance of certainty for MTD delivery partners and customers. It highlights the December 2022 announcement of the phased MTD for ITSA timeline, ongoing detailed planning and roadmap sharing, and continued engagement on communication plans, with further messaging planned for April 2026.

HM Treasury

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31 Conclusion Acknowledged

Eightieth Report - Progress with M…

HMRC concern over MTD delays limiting software providers and creating taxpayer barriers

We asked HMRC if it was concerned repeated delays would limit the number of software providers willing to develop products for taxpayers, and whether this could create a barrier for taxpayers using the programme. It told us it was worried … Read more We asked HMRC if it was concerned repeated delays would limit the number of software providers willing to develop products for taxpayers, and whether this could create a barrier for taxpayers using the programme. It told us it was worried about this, and it recognised that the announcements in December had clearly added to this risk. HMRC accepted that the sooner it could provide certainty about the size of the population and the requirements, the sooner it could mend the fences with the industry and make progress with increasing the software on offer.73 The Business Application Software Developer Association (BASDA), the trade body for software developing companies in the UK, explained that software companies cannot continue to plan with continued uncertainty and had already spent millions in developing existing product with no customers.74 Both the Institute of Charted Accountants in England and Wales (ICAEW) and APARI Software Ltd told us that some software providers had already cancelled their plans to develop products for the Self Assessment programme because of the most recent delays.75 BASDA also told us that they had repeatedly raised concerns with HMRC and HM Treasury over the past few years, and in August 2022, wrote an escalation letter to HMRC’s senior leadership team citing concerns over five key areas. These were commerciality, communication, regulatory/policy, technology, and testing. BASDA told us that it wrote a further escalation letter in November 2022 asking for full and timely engagement and clarity, given the further diminishing confidence in the programme among the developer community. BASDA also told us that the delays and descoping announced by HMRC in December 2022 were devastating to invested members of the software industry and recommended a lessons learned exercise with the software developer industry to ensure that the programme would be best set up to succeed in future.76 HMRC recognised that the software markets’ confidence and willin Show less

Government Response

The government agrees with the conclusion, acknowledging the need for certainty and assurance for MTD delivery partners and customers. It outlines the December 2022 announcement of the phased MTD for ITSA timeline, ongoing detailed planning and roadmap sharing, and continuous stakeholder engagement on communication plans, with a focus on preparing for April 2026.

HM Treasury

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33 Conclusion Acknowledged

Eightieth Report - Progress with M…

HMRC needs robust plan to communicate Making Tax Digital changes to taxpayers

As well as having significant parts left to design and test and have the software development industry buy into and build products, HMRC also needs to plan how it will communicate these changes to its customers. HMRC told us that … Read more

Government Response

The government agrees with the conclusion, recognising the importance of certainty in the MTD delivery plan. It outlines ongoing efforts, including sharing detailed plans and a roadmap with partners, seeking feedback on communication plans, and short-term focus on beta testing, with additional messaging planned closer to April 2026.

HM Treasury

View details

Government Response AI assessment · 33 of 0 classified

Accepted 16

Acknowledged 3

Not Addressed 1

Rejected 13

Total 0 recs + 33 conclusions

Correspondence 1 letter

3 Jul 2023 Correspondence from Jim Harra, Permanent Secretary and Chief Executive, HM Revenue and Customs to PAC Chair Dame Meg Hillier – re Tax-deductibility of business costs incurred in Making Tax Digital for Income Tax Self-Assessment, dated 29 June 2023

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