Source · Select Committees · Public Accounts Committee
Recommendation 27
27
Accepted
HMRC plans unrestricted Making Tax Digital pilot 12 months before mandatory introduction.
Conclusion
HMRC told us that it was aiming to have built sufficient functionality to be ready for an unrestricted and open pilot of the programme for Self Assessment 12 months before it is to be introduced as a mandatory requirement for the first cohort of customers in 2026 (for those with incomes over £50,000). It said that this would allow people to voluntarily join before mandation if they wanted to. HMRC explained that it planned to encourage the second group (those with incomes between £30,000 and £50,000) to voluntarily join the programme’s pilot before mandatory requirements come into force in April 2027. 59 Q 48 60 Q 68 61 PTD0007, Written evidence submitted by the Institute of Chartered Accountants England and Wales, 19 June 2023 62 C&AG’s Report, para 3.29 63 PTD0007, Written evidence submitted by the Institute of Chartered Accountants England and Wales, 19 June 2023 and PTD0008, Written evidence submitted by the Chartered Institute of Taxation, 19 June 2023 64 Q 59; PTD0007, Written evidence submitted by the Institute of Chartered Accountants England and Wales, 19 June 2023; PTD0008, Written evidence submitted by the Chartered Institute of Taxation, 19 June 2023; C&AG’s Report para 3.25 65 Qq 56, 58 66 Qq 60–63, 67 20 Progress with Making Tax Digital HMRC said that it wanted to make sure that everyone who was in scope for mandation in both periods was migrated to the new system as soon as possible and that it aimed to open it up on a voluntary basis for both income groups in 2025.67
Government Response Summary
The government has updated eligibility criteria for the MTD beta testing phase and committed to continuing private beta testing in 2024-25 and a public beta in 2025-26, aligning with HMRC's plans for an unrestricted pilot.
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.