Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Accepted
HMRC still has major design issues and development tasks to complete for Making Tax Digital.
Conclusion
In order to deliver the programme, HMRC still has: some difficult design issues to work out and fix; to fully run an unrestricted pilot to test systems and customer journeys; to test, cleanse and move Self Assessment taxpayer data in time for that pilot and mandation; and build in time and rebuild trust to allow software developers to get products developed for the programme to work. In answer to our question about how much support there would be for customers who entered the Self Assessment pilot for Making Tax Digital, HMRC recognised that to meet the goal of having full functionality on the programme by 2024, it still needed to make sure the programme is sufficiently functional so that the cost of supporting the pilot is manageable. HMRC acknowledged it had not yet finalised its design of the programme for Self Assessment, and it still needed to build sufficient functionality into HMRC systems so that the programme’s technical elements can work for taxpayers and agents.58 HMRC told us that it was looking at the design of the current system and, in particular, at end-of-period statements. It said it was going back to the strategic reason why it wanted this end-of-period statement in the design, which was to keep taxpayer records up to date so that they are “less likely to make mistakes or forget 55 House of Commons, Statement UIN HCWS465, HM Revenue & Customs Update – Statement by The Financial Secretary to the Treasury, 19 December 2022 56 Qq 24, 27, 30–31; C&AG’s Report para 3.3 57 Qq 80–81, 84–86 58 Qq 27, 44 Progress with Making Tax Digital 19 things” and “are likely to be more accurate”. It said that it was still planning how the customer journey and the use of real-time information would work through third-party software.59 We asked HMRC if it had experts from outside the department involved in the design for essential technical advice. HMRC explained that it had a number of external forums, and that on particular design issues, it would sit down with taxpay
Government Response Summary
The government has implemented specific design changes for MTD, including a revised customer journey for jointly-held property and a commitment to allow multiple agents by April 2026, and updated eligibility criteria for beta testing, addressing outstanding design and pilot issues.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 The government has provided its full response in the following paragraphs, together with the announced changes to the design of MTD for ITSA made at the 2023 Autumn Statement. 2.3 This announcement addressed the most significant outstanding design issues. It resulted from consultation and collaboration with external stakeholders, undertaken as part of a review into MTD and the needs of smaller business in 2023. In particular, the announcement included: • a revised customer journey for landlords with jointly-held property; • amendments to the design of quarterly updates; • confirmation that the requirement to complete an End of Period Statement within MTD will be removed; and • a commitment to develop a solution allowing multiple agents to act for customers, by April 2026. 2.4 HMRC also updated its eligibility criteria to support MTD’s beta testing phase, clarifying who can participate. 2.5 HMRC will continue work with external stakeholders on other more detailed policy design elements ahead of mandation in 2026, alongside continuing a private beta testing programme in 2024-25 and a public beta in 2025-26 to ensure that service design meets users’ needs.