Recommendation 24

HMRC received approval from government in December 2022 to delay and rephase the Making Tax Digital programme for its Income Tax Self Assessment (Self Assessment) customers.55 This gave HMRC a further two years to finalise the programme before introducing it for taxpayers with incomes over £50,000 from April 2026 and three years more before introducing it for taxpayers with incomes over £30,000 from April 2027. HMRC told us that it had learned from its experience of the introduction of the programme for VAT that it needed some contingency in the timeline for Self Assessment’s timetable. HMRC said that a challenge for it in the past, and one of the reasons for the delay, was that some key pieces of functionality were not in place. This meant HMRC would have needed to redeploy more operational staff than it could afford to deal with workarounds. It said that building in more contingency was a core reason why it asked for a further two- year extension to the programme’s delivery timetable. It explained that, up to this point, it had not built in contingency to allow for unexpected delivery challenges, external events or government policy announcements alongside the programme.56 We asked HMRC if the phasing as well as the delay was also helpful for the work it has left to do. It said the phasing of introduction across two cohorts of taxpayers allowed for more contingency if it ran into any risks or difficulties. We asked HMRC if it was confident there would be no more delays given there was still a long way to go. HMRC acknowledged there had been some big unforeseen risks in the delivery of the programme to date and there could be further unforeseen risks but that it had learned lessons from what had happened so far.57 The Programme’s unresolved design issues