Recommendation 7

HMRC also told us about the external events that contributed to the delays in the programme’s delivery. These included EU Exit and the COVID-19 pandemic’s impact on business taxpayers’ readiness and engagement, and government policy announcements, in particular the Health and Social Care Levy in 2021.13 HMRC told us that the delays to Making Tax Digital for Self Assessment will likely mean the Exchequer misses out on additional tax revenue of £1.75 billion.14 We asked HMRC whether part of the problem was that it had not given itself long enough to introduce the changes needed as part of the programme. HMRC told us that up until the re-phasing of the Self-Assessment element of the programme in December 2022, it did not have any contingency in the programme, for example, to cope with the impact of the Health and Social Care Levy.15 It told us that it had now built-in contingency for unanticipated design issues and policy announcements to the delivery timetable for the rest of the programme.16