Select committee: Public Accounts Committee
Conclusion 29
23rd Report - The cost of the tax system
Published 30 Apr 2025
Addressed to HM Treasury
Public Accounts Committee The cost of the tax system All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The previous Public Accounts Committee found in 2023 that rather than reducing the overall burden on customers as HMRC had initially expected, MTD was imposing significant additional burdens and costs at a time when many of its customers could least afford it. The Committee concluded that HMRC had lost sight of the need to put taxpayers at the heart of changes to the tax system and there was a risk that planned changes would add further 51 Q 54 52 Q 74 53 Committee of Public Accounts, Progress with Making Tax Digital, Eighteenth Report of Session 2022–23, HC 1333, 24 November 2023, p 3–4 54 C&AG’s Report, para 3.15 55 Comptroller and Auditor General, Progress with Making Tax Digital, Session 2022–23, HC 1319, National Audit Office, June 2023, para 2.14 56 C&AG’s Report, para 3.16 57 Q 64 17 complications rather than simplify the system.58 Since then the government has confirmed that MTD will be extended to Income Tax Self Assessment for many sole traders and landlords.59
From: Public Accounts Committee, 23rd Report - The cost of the tax system (HC 645), 30 April 2025
Government response
The government responded to the whole report on 18 September 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it "agrees with the Committee's recommendation" on each of the report's recommendations, and reports that several are already implemented while others carry target dates.
- On simplification, the government will publish HMRC's Transformation Roadmap in summer 2025, which "will include the metrics HMRC will use to report progress".
- On trust, the government agrees with both recommendations and describes them as "Recommendation implemented", citing annual customer surveys, complaints data and focus groups.
- On compliance productivity, it says HMRC "will recruit an additional 5,500 compliance staff by March 2030", alongside other measures to close the tax gap.
- On legacy IT, HMRC "will write to the Committee" on its remediation plans, forecast cost and expected savings, with a target implementation date of September 2025.