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dog refusing to go | accountingweb | HMRC disagrees with some of PAC's MTD recommendations
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HMRC digs heels in and claims MTD is all on track

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HMRC has disagreed with concerns raised in a report by the Public Accounts Committee about the costs, delays and deliverability of Making Tax Digital.

22nd Feb 2024
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The government has responded to the concerns raised in the report by the Public Accounts Committee (PAC) about the costs, delays and deliverability of the Making Tax Digital (MTD) programme.

In the report, published after the Autumn Statement in November 2023 in response to a report by the National Audit Office in June 2023, the PAC (a cross-party group of MPs responsible for examining the value for money of government projects) found that “HMRC has lost sight of the need to put customers at the heart of its changes to the tax system”. The committee drew six conclusions and made 11 recommendations. These were designed to ensure that in its ongoing plans for the flagship programme the Revenue:

  • is realistic
  • specifies and commits to a budget and timetable, and
  • holds senior leaders accountable for delivery.

The government has accepted all but three of the recommendations and, in the Treasury Minutes for February 2024, outlined steps it has taken to address some of the issues highlighted. 

So far so promising, but a delve into the detail reveals very little new information and nothing much to get excited about. Those eagerly anticipating any meaningful change resulting from the damning PAC report will be kicking themselves for getting their hopes up.

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Replies (57)

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By Paul Crowley
22nd Feb 2024 16:48

HMRC are going nowhere with this, just wasting our money on a fantasy system that just cannot get delivered.

Thanks (26)
Chris M
By mr. mischief
22nd Feb 2024 19:22

"Captain Smith just heading off to my cabin for forty winks, nothing to see here. Wake me up when we get within 40 miles of New York. I don't want to hear about any icebergs."

Thanks (27)
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By FactChecker
22nd Feb 2024 19:37

I didn't think that even Nursery schools considered a child running around (with its fingers in its ears and screaming "I'm not listening to you, nyah, nyah, nyah") to be a model of decorum.

And it certainly looks even less befitting of our national Tax Collection agency.
Maybe we should all try to emulate them - after all it seems that reality is in the eye of the beholder!

In the meantime I'm off in search of a dark alley where I can beat myself up for, however briefly, daring to hope that the PAC recommendation "to hold senior leaders personally accountable for delivery" would come to pass.
Without that, none of the players actually care what happens.

Thanks (15)
Replying to FactChecker:
Tornado
By Tornado
22nd Feb 2024 22:45

Without that, none of the players actually care what happens.

I am long past caring what happens as well.

Thanks (10)
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By FactChecker
22nd Feb 2024 19:45

Amy (or anyone else from Aweb intending to be at FAB),

If you want a simple one-two question with which to grill the HMRC representative, you could try:
1. Are there criteria for measuring the failure of MTD each year?

If yes (unlikely), follow-up with a request for those to be published; but if no ('it won't fail' etc) ...
2. If there are no metrics to determine degree of failure, then there can't be any to measure success?

Thanks (14)
Replying to FactChecker:
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By johnjenkins
23rd Feb 2024 09:55

Those questions might be a bit difficult for HMRC to understand. Make it a bit simpler "what is Jim Harra's name?"

Thanks (6)
Replying to johnjenkins:
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By stanbu
23rd Feb 2024 10:26

Don't tell him Pike!

Thanks (7)
Replying to johnjenkins:
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By Postingcomments
23rd Feb 2024 10:28

Not sure what his name is, but I bet he will soon be a well paid non-exec in tax tech companies.

If he isn't, I'll be genuinely baffled as to why he is championing this so hard.

Thanks (7)
Replying to Postingcomments:
Pile of Stones
By Beach Accountancy
23rd Feb 2024 14:23

Why would any company want to employ someone who has been an embarrassing failure?

Thanks (3)
Replying to Beach Accountancy:
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By Tom+Cross
23rd Feb 2024 15:33

They do it regularly, in the civil service. Surely you've noticed.

Thanks (3)
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By David Ex
22nd Feb 2024 20:26

Still genuinely struggle with how this can possibly work for the majority of taxpayers who rely heavily on their accountants. Is the plan still to require quarterly returns within a month of the quarter end?

Thanks (9)
Replying to David Ex:
Chris M
By mr. mischief
22nd Feb 2024 22:21

Easy. MTU. Making Tax Up. See my previous posts on this load of drivel from HMRC.

Thanks (10)
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By Rob Swan
23rd Feb 2024 09:07

I think my browser has a new feature - I can literally smell the BS!

Craig Ogilvie, director of MTD, has been confirmed as a speaker (at FAB). Well, he's either really stupid or really ballsy. I'll wait to see which.....

Thanks (3)
Replying to Rob Swan:
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By johnjenkins
23rd Feb 2024 11:29

He'll be given a script to read.

Thanks (4)
Replying to johnjenkins:
Pile of Stones
By Beach Accountancy
23rd Feb 2024 14:25

After making the audience wait for 59 minutes with awful music playing, interrupted every 2 minutes by "your call is important to us" and "why haven't you looked on our website, you d****d"

Thanks (5)
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By Postingcomments
23rd Feb 2024 09:17

Just don't give it any more of your time. Let them do what they want. Let it fail.
No need to have your time wasted as well as your taxes.

Thanks (11)
By ireallyshouldknowthisbut
23rd Feb 2024 09:20

Given this is a dead project, HMRC would do well looking up the stages of grief.

They are still very early on in the "denial" stage.

I dont think anyone is taking this project serioulsy outside of the PR team at HMRC. And they are only doing it for the £££££ and probably dont belive their own statements.

I thought most of the third party software houses had largely given up on it - and they are critial for delivery. Many have spent some very serious sums of money on this project and its come to nothing. Accountants of course are quite rightly just laughing in HMRC's face on this.

You cant deliver a mad project like this just by willing it into existence.

Its a failed project. Dead, gone but they are just enjoying spending the cash.

Thanks (16)
Replying to ireallyshouldknowthisbut:
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By Rob Swan
23rd Feb 2024 09:51

"You cant deliver a mad project like this just by willing it into existence."
But they're giving it their best shot. Probably go off like a Trident missile test ;)

Thanks (6)
Replying to Rob Swan:
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By Postingcomments
23rd Feb 2024 10:35

It seems to be increasingly the case that governments are trying to rule by fiat - just declaring that things will happen. Then when they don't, they just spin the story and the statistics to gaslight us all into thinking that everything is going great.

Maybe that's the end result of so few MPs and bureaucrats ever having a real job. They don't know how things actually work or how things are made. I bet most of them have never made anything. Never fixed anything. Never got dirt under their fingernails.

Heck, a senior cabinet member, before entering politics, was flogging dodgy e-books online. This was when he was in his mid 40s - not when he was a student. I think that tells us a lot about where we are and how we got here.

Thanks (4)
Replying to Rob Swan:
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By johnjenkins
23rd Feb 2024 11:30

Or a dead parrot.

Thanks (1)
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By Alanpryan
23rd Feb 2024 09:34

Much the same as the smelly stuff digs it's heels in when trying to avoid removal from a shovel?

Thanks (2)
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By Ammie
23rd Feb 2024 09:45

We have done the talking. Let HMRC press on and we'll address the certain flaws and issues of functionality one at a time when they arise and speculate amongst ourselves how long it will be before there are major U-turns, relaxations and exemptions introduced to "shoe horn" the system into place.

Thanks (5)
Replying to Ammie:
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By mikeyban
23rd Feb 2024 09:57

How many poor children could have been given more education, better food, warmer clothes.

If enough people tell you are sick..... lie down.

This will not work . Are they waiting for a new Government so they do not have the embarrassment of saying they have wasted a shed load of time and money.

It's sad to watch HMRC not be honest.

Thanks (8)
Replying to mikeyban:
By ireallyshouldknowthisbut
23rd Feb 2024 12:08

mikeyban wrote:

How many poor children could have been given more education, better food, warmer clothes.

If enough people tell you are sick..... lie down.

This will not work . Are they waiting for a new Government so they do not have the embarrassment of saying they have wasted a shed load of time and money.

It's sad to watch HMRC not be honest.

I imagine this is the main plan. Dont take the political flack of the failed project and all the millions wasted, but wait until a new goverment (of whatever flavour) just cans it as a waste of money.

That of course credits HMRC big wigs with some brains. Something which is possible a little too generous.

Thanks (4)
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By youngloch
23rd Feb 2024 10:15

With the endless delays to MTD and the continuing roll out of cloud accounting software then, in theory, surely this should be the peak period when taxpayers would be doing things themselves with an easy once a year filing window.

Combine that with an economic slowdown since Covid and then we accountants should surely be having an easing off in workload?

Don't know about the rest of you, but I'm not seeing that so what in theory is coming up for our profession with the reassurance of knowing that the pool of talent waiting to join our teams feels weaker than ever!?

AI is helping us all a lot but there's a point on every job where the AI can only do so much because our small business clients are not the most predictable of entities.

Also don't forget that after every recession comes a recovery and lots of start ups....... more clients?

Busier small businesses will result in those that had been doing it themselves probably looking to delegate more out to us..... (we're already seeing that happening)

And then MTD will arrive. A final "normal year" and rolling out a new quarterly system all at the same time.

So will that see our existing clients taking on more of the work themselves ? I doubt it... perhaps I even fear it because we all know what a nightmare it can be on occasion when clients try to be helpful....

What about the millions who file their own returns? Well apparently 98% file using the HMRC website which, of course, is as basic as can be and will not work for MTD!

Those individuals will, don't forget, be preparing the previous years 2025/26 return (file by 31 January 2027) but will have to do Q1 and Q2 for 26/27 long before then........ what can possibly go wrong?!

So they will face a choice, go from their basic submissions to full digital cloud software (with a monetary and time cost), seek help from accountants (higher monetary cost but frees up their time) or bury their heads.

Whichever way you look at it then I foresee us all being busier than ever, probably forced to put our rates up with demand swamping supply, those of us within 5-10 years of retirement tempted to rush for the door, and many many many taxpayers being absolutely lost.

Oh and there'll be more cloud accounting firms springing up giving little/no advice to their clients which normally means that, once the clients wake up, they find themselves a proper accountant.

Other than that, yes it's on track - trouble is the train has long since gone trundling past the sign that said "warning - dead end ahead!"

Thanks (5)
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By clivebaker
23rd Feb 2024 10:16

It is a joke, I have done the VAT MTD and it just picks up numbers from an excel spreadsheet. No benefit to anyone!

Thanks (10)
Replying to clivebaker:
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By sodge2000
23rd Feb 2024 12:53

Clive, I have wondered what the benefit is of VAT MTD. As a small business I could not afford to upgrade my software to accommodate VAT MTD so I have to use a company to provide the service for me at a cost of £9 a submission. The company gets a copy of my software generated VAT return and files it with HMRC. I am still waiting from anyone how this gives HMRC better information rather my filing it directly with HMRC.
Soraya

Thanks (5)
Replying to sodge2000:
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By Rob Swan
23rd Feb 2024 14:22

Portico (mytaxdigital.co.uk) free bridging for MTD VAT, simples!
I have no assocaition with the company - I use them myself. Other (free) options available I do believe.

Thanks (0)
Replying to sodge2000:
By kenny achampong
24th Feb 2024 11:11

That's simple, there is no benefit. The government has probably lost a lot by tax payers trying to move over to Xero Quickbooks etc with zero book-keeping experience. Just saw one this week claiming VAT on every payment, including foreign payments, pensions, healthcare and insurance. He probably thought Xero was great.

But HMRC told the government that the "total additional tax revenue from MTD of around £185m or £195m, depending on the method chosen" Unfortunately, the method chosen was plucking a random figure from thin air by the HM office for making things up.

Thanks (3)
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By Yossarian
23rd Feb 2024 10:17

MTD isn't dead, it's merely pining for the Fjords. Lovely software the MTD, beautiful plumage..

Thanks (10)
By Nebs
23rd Feb 2024 10:26

It makes you wonder if we really need HMRC. Let the accountants be responsible for issuing penalties to their clients who miss deadlines or don't pay on time, and make accountants investigate competitors clients returns (one investigation for every 100 returns you submit) in return for 50% of any extra tax they recover. We do everything else, this would be a small price to pay to get rid of a load of bureaucratic inefficiency.

Thanks (3)
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By RichBatoul
23rd Feb 2024 10:39

MTD - must be part of the £1.4bn contracts currently with Fujitsu.

No problem there then, Fujitsu will be able to amend (without trace) 12 million SA records and all the self-employed will be convicted of tax dodging.

Problem sorted - the self-employed will then be housed on floating detention centres and there will be so many of them it will block the Channel.

Then there will not be enough room for the ribs to cross from France and our illegal immigration problems will be solved too.

Simples :)

Thanks (8)
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By Twickers Call
23rd Feb 2024 11:02

It is disturbing to learn that the Government disagreement to PAC. I wonder who the government Is? Are they part of the HMRC staff? Secondly HMRC cannot give guarantees or an estimated additional revenue from intended MTD. Why this MTD is going ahead? Are they supported by the big software companies like HORIZON? Poor taxpayers are forced to support the software companies for unknown reasons. If you run a business with no estimates and projected surplus in mind then the plan in your mind will lead to bankruptcy. It is our money they are playing with the full authority and sadly with no responsibility.
Is that what MTD is intended for?

Thanks (3)
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By Postingcomments
23rd Feb 2024 11:15

If we aren't going to be listened to, maybe we should become a bit less governable?

This year, my aim is to submit lots of paper SA returns.
Print out, put in post.

It's not much, but it's honest work.

Thanks (8)
By mydoghasfleas
23rd Feb 2024 11:17

The path of the righteous businessman* is beset on all sides by the inequities of the selfish and oppressive tyranny of HMRC. Blessed is he who, in the name of charity and goodwill, shepherds the businessmen through the valley of the darkness of MTD. For he is truly his brother's keeper and the finder of lost children. And accountants will strike down upon HMRC with great vengeance and furious anger those who attempt to poison and destroy our clients. And you will know we are the Lords when we lay our vengeance upon you.

Above with thanks to Ezekiel 25:17, Samuel L Jackson et al.
* words of any gender shall be held and construed to include any other gender, and words in the singular number shall be held and construed to include the plural, unless the context otherwise requires

As with most government contracts (examples)
>infrastructure (HS2 or nuclear power stations),
>defence contract (Royal Navy frigates they go dark not as a detection countermeasure but simply because the engines are not up to the job so going dark is literal when the power goes off. Armoured personnel carriers that no one can travel in because the noise is intolerable),
>software (too many to even start listing)
> PFI (payment forever increases)

they are delivered late/not at all, with underperformance and enormous cost overruns. Why should MTD be any different?

Meanwhile 630 windbags full of their own importance huff and puff about a breach of procedure in an SNP Opposition day motion in the House of Commons (a motion that in any final form might make them feel good about themselves but make no difference to anyone in the middle East) rather than get on with governing this Country. At least they need not worry about a military coup here, there are not enough armed forces to implement one.

Frankly, I agree with all the contributors here. Does HMRC really believe the PAC is convinced? Does it care anyway?

Thanks (9)
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By steve 12321
23rd Feb 2024 11:32

I would not trust them to tie my shoe laces let alone make the right decision on this disaster. Put them all on the phone lines answering calls (as long as they have a clue on what to do when asked a question)..

Thanks (6)
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By PAULLEWISFCCA
23rd Feb 2024 11:35

Wat Tyler, Robin Hood and William Tell come to mind - i just cant think why...

Thanks (1)
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By Ian McTernan CTA
23rd Feb 2024 11:46

So many committees and fingers in the pie, no wonder it's taken so long and cost so much. At the heart of the issue is HMRC is totally disconnected from the real world, with most of the major decision makers being career civil servants who have little concept of what running a small business is like. Adding another £460 (at least!) to the costs of small and micro businesses isn't going to help anyone.

As for holding officials to account, good luck with that: the worst that could happen to them is moved sideways and given a gong or a knighthood.

Maybe they could start with dropping 'customers' and sticking with 'taxpayers'. If we had a choice we'd all have moved our business to a different supplier years ago!

Thanks (11)
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By petestar1969
23rd Feb 2024 11:47

This MTD farce is a bit reminiscent of the introduction of e-filing SA returns. It didn't work properly to start with and we, the accountants, had to help HMRC sort it out. Luckily there was a paper-based back-up system for the returns. What's the paper -based back-up for this farce not working? Will we just post HMRC the cigarette packets with the calculations on every quarter?

Thanks (1)
Replying to petestar1969:
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By djtax
04th Mar 2024 12:25

They will be keeping the existing SA system (if only - technically - for the sub £30,000 brigade) but I bet many of those above the 'mandatory' threshold for MTD will simply carry on using the SA system. Look at what happened 4/5 years ago with 'mandation' for MTD for VAT - loads of businesses simply carried on using the old system which was not switched off until very recently. At the time HMRC backtracked at the eleventh hour to officially allow businesses to continue using the old VAT system given the 'hiccups' with MTDs introduction.

Thanks (0)
Tornado
By Tornado
23rd Feb 2024 11:57

I think it might be a good idea to delegate a lot of the MTD work to Alexa. That surely will maintain the "Digital Link" that HMRC are so obsessive about and will save me loads of time.

Thanks (4)
By Nick Graves
23rd Feb 2024 13:01

If MTD IS on track, would it be a moral dilemma to push Jim Harrass onto said track, in order to derail it and save millions of other lives instead?

I know they're all off their bloody trolley , anyway.

Thanks (2)
Replying to Nick Graves:
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By djtax
04th Mar 2024 12:28

Its not Harra to worry about - its his no. 2 A Macdonald who is pushing MTD.

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Replying to djtax:
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By johnjenkins
04th Mar 2024 13:45

"Macdonalds, Macdonalds, Ketucky Fried Chicken and a Pizza Hut."

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By indomitable
23rd Feb 2024 13:26

What complete bleeding waste of everyone's time and money!!! This country has fallen apart!!! Is this the best we can do?? All naval gazers making up jobs and projects to justify their salaries!!

Thanks (4)
Replying to indomitable:
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By flightdeck
23rd Feb 2024 14:50

It is maddening - it is beyond incompetence. Our public sector is now its own failed state.

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Replying to indomitable:
boxfile
By spilly
23rd Feb 2024 18:16

I see no ships!

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By codling
23rd Feb 2024 14:32

Some lucky entrepeneur must have made a fortune selling rose coloured spectacles to HMRC!

Thanks (2)
Replying to codling:
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By Open all hours
23rd Feb 2024 15:44

HM Government, the perfect customer, understand nothing, pay everything.
(The Long Johns circa 2005).

Thanks (1)
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By flightdeck
23rd Feb 2024 14:44

6 months or more ago we were informed MTD was already 5 times over budget.

In what mental institution is this "on track"?

Thanks (4)

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