Recommendations & Conclusions
3 items
30
Conclusion
Eightieth Report - Progress with Making…
Acknowledged
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 and had knocked confidence in the programme among those in …
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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 and had knocked confidence in the programme among those in the software industry. HMRC said it was working very closely with the software providers to give them as much certainty as possible so they could continue to develop products and create a healthy marketplace. HMRC acknowledged that the sooner it could agree the design for the Self Assessment programme, the easier it would be for software developers to start developing the software. HMRC recognised that providers would not build the software until there was more progress with the design. APARI Software Ltd, told us that Making Tax Digital for Self Assessment required significantly more investment from software providers than the VAT part of the programme. APARI Software Ltd explained that the programme’s dependency on the software market meant that repeated delays 67 Qq 40, 81–83, 86, 89, 92 68 Qq 38, 80; C&AG’s Report Figure 8 69 Qq 49, 50; PTD0014, Written evidence submitted by APARI Software Ltd, 19 June 2023 70 Q 49; C&AG’s Report, para 3.28 and Figure 9; PTD0014, Written evidence submitted by APARI Software Ltd, 19 June 2023 71 PTD0014, Written evidence submitted by APARI Software Ltd, 19 June 2023 Progress with Making Tax Digital 21 could lead to the programme failing if the commercial opportunity Making Tax Digital was expected to provide did not justify the major investment required by the software industry.72
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Government response AI 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 …
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HM Treasury
31
Conclusion
Eightieth Report - Progress with Making…
Acknowledged
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 …
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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
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Government response AI 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, …
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HM Treasury
33
Conclusion
Eightieth Report - Progress with Making…
Acknowledged
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 it had a very strong communication plan and it was …
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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 it had a very strong communication plan and it was working with the software industry to do some joint marketing because they can reach more customers working together. HMRC did not confirm how it would communicate with customers who do not use accounting software currently but said that it had milestones and a plan in place to ramp up awareness. In answer to questions about its communication plans, HMRC told us it had learned from the programme’s introduction for VAT that businesses would say “come back and tell me when I need to do something”. It said that while it did want to build up awareness in advance with agents, it wanted to give taxpayers notice for when they need to actively do something.84 79 Q 50, 57–59 80 Q 73; C&AG’s Report, Figure 5 81 PTD0002, Written evidence submitted by Rossmartin Tax Consultancy Limited, 19 June 2023 82 PTD0005, Written evidence submitted by Coachbuilt Cars Ltd, 19 June 2023, C&AG’s Report, para 2.7 and 2.8 83 Qq 74–75 84 Qq 90–92 Progress with Making Tax Digital 23
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Government response AI 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 …
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HM Treasury