Recommendation 14

We asked HMRC, given the concerns about additional burdens on customers, how it would ensure that businesses complied with the programme and compliance didn’t decline. HMRC explained that there were two key requirements that it believed will foster good compliance from business taxpayers using software. The first was a requirement 27 PTD0006, Written evidence submitted by the Association of Taxation Technicians, 19 June 2023, PTD0008, Written evidence submitted by the Chartered Institute of Taxation, 19 June 2023 28 Q 55 29 Qq 48, 52–54 30 PTD0004, Written evidence submitted by Association of Accounting Technicians, 19 June 2023, PTD0007, Written evidence submitted by the Institute of Chartered Accountants England and Wales, 19 June 2023, PTD0012, Written evidence submitted by Low Incomes Tax Reform Group, 19 June 2023 31 PTD0012, Written evidence submitted by Low Incomes Tax Reform Group, 19 June 2023 32 Qq 25–27; C&AG’s report, para 3.31 14 Progress with Making Tax Digital to make light-touch quarterly updates to HMRC, which will evidence that taxpayers are keeping their tax records up to date. The second was requiring that the software uploads directly to HMRC systems without the taxpayer or their agent having to intervene or transfer the data into another system, which was where some errors arise. It told us that other than Making Tax Digital, it had not identified any other options that would allow it to address the tax gap among small businesses.33 HMRC’s engagement with stakeholders on Making Tax Digital