Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Rejected
Stakeholders remain concerned about MTD implementation plans and HMRC's lack of responsiveness.
Conclusion
Stakeholders such as the Low Incomes Tax Reform Group (LITRG) remain concerned about how realistic HMRC’s plans for implementation are as well as HMRC’s lack of concern or planning for low income and vulnerable taxpayers.41 We also heard that stakeholders had fed back issues and worries about the programme on multiple occasions, through numerous communication channels, with no acknowledgement or confirmation they were being listened to or acted upon. For example, the trade body for software developers, Business Application Software Developer Association (BASDA) said it had, “flagged concerns with HMRC and FSTs [Financial Secretary to the Treasury] over the past few years regarding the need for a more fit-for-purpose scope (and accompanying policy areas) along with service delivery and engagement with our industry – citing concerns across all key areas” and “regrettably, there was little productive engagement that gave BASDA and its members confidence that the key issues were going to be properly investigated and resolved in a timely manner”.42 HMRC told us that it “was not going to overlook the need to involve our stakeholders fully so we have a full understanding of all the issues” and that it recognised it had urgent matters to resolve and it had “the right mechanisms in place to bring those designs to fruition as soon as possible”.43 The costs of Making Tax Digital on customers
Government Response Summary
The government rejects the committee's observation regarding ongoing stakeholder concerns about implementation and support for vulnerable taxpayers, stating its priority is to make tax easy while balancing revenue raising and tackling the tax gap. It highlights regular engagement with taxpayer representatives and enhanced policy processes to consider taxpayer experience.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. A priority for government is to make it easy for taxpayers to get tax right. However, it needs to balance several objectives for the tax system, including raising revenue and tackling the tax gap. While these often align, there can be trade-offs to consider. HMRC regularly engages a range of taxpayer representatives, including the Administrative Burdens Advisory Board (ABAB), as new services are developed and to better understand issues faced by taxpayers. ABAB provides valuable insight, including on MTD for ITSA, where its views were important in informing the announcements made in the 2023 Autumn Statement. HMRC has also established an expert panel to consult on digital improvement ideas which provides insight into how to implement changes and provide the right support for vulnerable or digitally excluded customers. As part of HMRC’s governance, the Customer Experience Committee, which includes independent expert advisers, provides advice on customer-experience issues. HMRC shares plans for digital improvements with this committee. The government has recently enhanced existing processes which support policy and service delivery, ensuring these consider improving taxpayers’ experience. This includes improving training and internal guidance for policy officials; introducing checkpoints in the policy making process where senior officials review measures from a simplification and customer experience perspective; and ensuring advice to ministers sets out how a measure contributes to making the tax system simpler, fairer or supports growth. HMRC also runs research programmes to build understanding of customer needs, publishing analyses of impacts on individuals and businesses in Tax Information and Impact Notes (TIINs).