Recommendation 6

We are concerned that the repeated delays and poor design of the Self Assessment phase of the programme is deterring software providers from developing quality 8 Progress with Making Tax Digital products and will ultimately put customers at risk. Over 500 software products are available for Making Tax Digital for VAT, which can make it difficult for customers to make an informed choice about what to use. It also makes it hard for HMRC to conduct timely reviews of the quality of products and legitimacy of the providers. Stakeholders report that some software available has unexplained features that can lead to incorrect reporting. Customers can feel overwhelmed, and stakeholders have raised concerns about the security and safety of the products on offer, as well as some unexplained features and hidden costs. HMRC expects the number of software products for VAT to reduce but could not tell us whether it plans to introduce further quality measures to ensure software meets its accreditation standards. Delays and uncertainty to the Self Assessment rollout have likely played a role in software providers becoming increasingly hesitant to continue their investments into developing products for the programme. This has led to some providers pulling products from the market or reducing their investment in developing products for Self Assessment. We are concerned that these delays and attrition amongst software providers could result in higher prices or lower the quality of product on offer to taxpayers. HMRC’s lack of proper accreditation checks leaves us concerned about where responsibility and liability fall in the event of software or cyber security failures. HMRC did not say who would be liable if something went wrong but does not expect to penalise customers if there was an error in their tax submissions because of a software issue. Recommendation 6a: HMRC should, within three months, write to the Committee and set out how it will ensure that it strikes the right balance b