Source · Select Committees · Public Accounts Committee
Recommendation 33
33
Accepted
HMRC identifies future potential to leverage Making Tax Digital software for compliance and productivity.
Conclusion
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
Government Response Summary
The government agrees with the implied recommendation to learn lessons and leverage software by detailing its existing processes for customer research, user insight, and assessing customer impacts to inform service design and policy changes.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 HMRC conducts regular research with customers to understand their needs and perspectives. HMRC’s Government Social Researchers conduct qualitative and quantitative research, including nationally representative surveys, with thousands of customers each year. In 2024-25, HMRC delivered 18 commissioned and 15 in-house social research projects. Additionally, user research is a core activity of HMRC’s digital programmes. In 2024-25 HMRC conducted user research with 1,835 participants. Findings were used to inform design decisions on products and services. 5.3 HMRC currently uses customer and user insight as part of its end-to-end change lifecycle for designing new services or making changes to existing ones. This is a critical aspect of design to ensure the department builds solutions that address customer needs and a foundation for evaluating the impact of the service to identify areas of improvement or new opportunities for innovation. 5.4 As part of its business case process, HMRC assesses formal change against Customer Guardrails, a framework for ensuring customer needs are thoroughly considered. Evidence of identified customer needs, including assessment of impacts on customer costs and benefits, is then recorded through completion of an External Customer Impact Assessment document. This forms part of the documentation required by HMRC governance boards. 5.5 Customer impacts are published in the ‘Summary of Impacts’ section of Tax Information and Impact Notes (TIINs). Where a measure or policy change is driven by customer need, this can be set out in the ‘Background to measure’ or ‘Policy objective’ sections of a TIIN as appropriate.