Eightieth Report - Progress with Making Tax Digital

Select Committee

Public Accounts Committee HC 1333 24 November 2023

Report Status Government responded

Conclusions & Recommendations 33 items

Source View on Parliament website

Government Response (AI assessment · 33 of 33 classified)

Accepted 16

Acknowledged 3

Not Addressed 1

Rejected 13

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Eightieth report from Session 2022-23 · published 8 Mar 2024

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Recommendations & Conclusions

3 results

30 Conclusion Acknowledged

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

Conclusion

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 Summary

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

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

Conclusion

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 Summary

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

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

Conclusion

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 Summary

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

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