Select committee: Public Accounts Committee
Conclusion 33
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)
We asked HMRC what lessons it should learn from the last 10 years of MTD. HMRC explained that when it has completed MTD for Income Tax Self Assessment virtually every business in the UK will be using business accounting software that speaks directly to HMRC’s systems. HMRC said it needed to look at how the software can be leveraged to help with tax compliance and business productivity, for example by guiding and supporting businesses.66 HMRC also referred to its joint consultation, with the Department for Business & Trade, on e–invoicing which began in February 2025. 67 HMRC thought e–invoicing might be relatively easy to add to business accounting software.68 Use of Artificial Intelligence and other emerging technologies
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.