Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Explain how HMRC will assure realistic timetable and budget for Making Tax Digital for Self Assessment.
Conclusion
HMRC’s poor track record of repeated delays to the Making Tax Digital programme and its lack of conviction in its latest timetable gives us little confidence that it will deliver the rest of the programme on time. HMRC’s original delivery timetable for the programme was not realistic and did not reflect the scale of work required. There remains significant uncertainty about whether HMRC can deliver the remainder of the Making Tax Digital programme on time. The programme has experienced multiple issues that HMRC did not foresee, and further risks could emerge as the programme progresses. HMRC’s current plan for the introduction of Making Tax Digital for Self Assessment shows it needs to deliver many elements in parallel, such as raising awareness, pilot development and testing, and staff training. There is a lack of confidence in the programme among stakeholders. With major uncertainty remaining over its design choices, HMRC will have less time to work through and test the technical solutions, such as how data security will be achieved for taxpayers with multiple agents or how a free service will work for those with the simplest affairs. HMRC asserts that its new timetable allows for unanticipated design issues and policy announcements, but it would not rule out further delays to the programme due to unforeseen circumstances. HMRC has set itself a target of April 2025 to be ready for a near-unrestricted voluntary pilot of 1.6 million Self Assessment taxpayers with incomes over £30,000, leaving it less than two years to be ready. HMRC has yet to decide how it will communicate the changes required in Self Assessment to its customers. Recommendation 5a: HMRC should, as part of its Treasury Minute response, explain how it will assure itself that the timetable and budget for Making Tax Digital for Self Assessment is realistic and how it will use independent technical assurance and other sources of evidence to provide this assurance. b) If further changes to the delivery t
Government Response Summary
The government agreed and stated that the MTD for ITSA timetable was set following detailed internal planning and shared detailed plans/roadmaps with external partners. HMRC has also sought feedback on communication plans and is supporting beta testing to ensure preparedness.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. administration system. The government recognises that HMRC’s customers and delivery partners need certainty and assurance over the delivery plan for MTD. The government announced the phased mandation timeframe of MTD for ITSA in December 2022. This announcement recognised the significance of these changes to HMRC, taxpayers and delivery partners - alongside the challenging economic environment facing small businesses. It was also informed by HMRC’s detailed internal planning. Following the announcement of the outcome of the small business review in November 2023, HMRC has also shared detailed plans and a delivery roadmap with key external partners involved in the delivery of MTD. HMRC has also sought feedback on its communications plans from agent representative bodies, software developers and tax agents and will continue to do so alongside sharing key messages and assets where available. Short-term plans are focussed on supporting software developers, agents, self-employed people, and landlords to take part in beta testing. As April 2026 approaches, additional messaging will be introduced to encourage those outside of testing to prepare for the new requirements. The government will ensure that any future decisions that affect customers or delivery partners – such as any future decision to amend the income threshold for mandation into MTD – provides adequate time for all parties to prepare.