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‘HMRC completely underestimated the scale of the challenge’ of MTD, says PAC report

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The change to MTD income tax for self assessment is on a larger scale and level of complexity to MTD for VAT, according to a recent Public Accounts Committee report, which HMRC has ‘completely underestimated’, and its poor delivery of the programme has resulted in repeated delays and spiralling costs. During the past seven years, £640m has been spent and that it could end up costing more than HMRC’s latest forecast of £1.3bn.

The report has also expressed concerns over the additional burdens of making tax digital on taxpayers at a time when many can least afford it and that ‘HMRC has lost sight of the need to put customers at the heart of its changes to the tax system’. It believes that HMRC has omitted to take account of upfront costs to customers in transitioning to making tax digital and there is a risk that the planned changes will add further complications rather than simplify it.

With some significant outstanding design issues still to be resolved and less than three years before HMRC begins introducing the programme for self-employed people, PAC remain sceptical whether HMRC’s new timetable of 2026 is achievable. ‘HMRC must ensure its plans are realistic and specify and commit to a budget and timetable and hold senior leaders accountable for delivery’, it added.

Issue: 1643
Categories: News
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