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Making Tax Digital £1bn over budget, says NAO report

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HMRC’s digital tax transformation programme is expected to clock in at five times its original forecast, according to a new report from the National Audit Office, which also called on the tax authority to prepare a separate business case for MTD ITSA.

12th Jun 2023
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The National Audit Office (NAO) report, Progress with Making Tax Digital, levelled an array of criticisms at those responsible for drawing up and delivering the initiative, including unrealistic ambition and timescales with unknown levels of risk, not engaging adequately with commercial partners, underestimating the complexity involved in moving from legacy systems, and short-termism.

The report also flagged that HMRC had omitted significant costs to taxpayers in its cost-benefit analysis when seeking approval for further funding for its tax digitisation initiative.

MTD more than £1bn over its initial forecast

HMRC’s initial estimate in 2016 for the cost of introducing Making Tax Digital (MTD) for VAT, self assessment for business taxpayers and corporation tax was £226m.

Since then, however, the project has been plagued by setbacks. While MTD for VAT was delivered on time for larger businesses in 2019, the income tax self assessment element has been delayed four times, with the latest postponement also shifting its scope and minimum threshold, and MTD for corporation tax proposals have yet to see the light of day. 

This has resulted in HMRC’s latest estimate of costs to introduce MTD for VAT and MTD ITSA to business taxpayers with incomes over £30,000 rising to £1.3bn – more than £1bn over its initial forecast.

‘Significant delivery risks remain’

Commenting on the report, head of the NAO Gareth Davies said the repeated delays and rescoping of Making Tax Digital have undermined the programme's credibility, increased its costs and put at risk the support of taxpayers and delivery partners, including those who are essential to the programme succeeding.

"HMRC's plan to digitalise the tax system has the potential to improve the system's efficiency and effectiveness,” said Davies. “It has made some recent progress on VAT but it has not yet tackled the most complex elements of the programme and significant delivery risks remain."  

Meg Hillier, MP and Chair of the Committee of Public Accounts, added: “HMRC wanted to increase tax revenue but completely underestimated the cost and scale of work required to move from its legacy systems and by business taxpayers to move to digital records.

“Eight years on, many tax professionals remain unconvinced by the proposed approach, which imposes significant costs and burdens on many self assessment business taxpayers,” continued Hillier. “HMRC has omitted much of these costs to business taxpayers when seeking additional funding. It now needs to demonstrate its plans add up.”

Responding to the NAO report, HMRC acknowledged that since 2016, a range of factors including Brexit and the pandemic have increased the project’s costs and timescales. However, it remains bullish about the eventual benefits of the programme. 

"A project of this scale naturally comes with challenges, but MTD will deliver a strong return on investment for the taxpayer,” said an HMRC spokesperson. “We have always been wholly transparent about costs for business. We remain committed to ensuring that free software will be available for those with the simplest tax affairs. This is reflected in our estimates. 

“Making Tax Digital is an important part of the transformation of the UK tax system,” continued the spokesperson. “MTD has already made it easier for businesses to get their VAT right by helping them reduce errors and freeing up time to help them to grow. We are committed to bringing the same benefits to self assessment customers.”   

Significant costs to taxpayers omitted?

The NAO paper also highlighted £1.5bn upfront transitional costs to VAT and self assessment business taxpayers with incomes over £10,000 to comply with MTD, which it claims HMRC omitted from cost-benefit analysis in its May 2022 business case seeking further government investment.

In its May 2022 business case, HMRC forecast total net ongoing costs to taxpayers of around £900m over five years to comply with MTD. However, the NAO found that HMRC had excluded significant upfront costs of £1.5bn to VAT and self assessment taxpayers from the business case's cost-benefit analysis. These costs relate to MTD-related taxpayer outgoings such as purchasing computers and getting support from agents to comply with the new scheme.

According to the NAO, the inclusion of these costs would have shown that the combined cost to the government and taxpayers of proceeding with MTD for self assessment would have exceeded the forecast additional tax revenue. Its March 2023 business case omitted upfront taxpayer costs entirely, meaning that both business cases presented a partial analysis of the costs and benefits of MTD when requesting further investment in the programme.

“It is obviously important that business cases for major programmes such as this contain all the relevant information to support decision-making,” commented the NAO’s Gareth Davies.

HMRC told the NAO it does not believe these omissions would have resulted in different decisions being taken, and provided the body with evidence that decision-makers were aware of the upfront costs ahead of making key choices.

In a statement provided to AccountingWEB, HMRC said it has “always acknowledged” the transitional costs for businesses in moving to MTD. 

“We also know …there are significant benefits available in the future,” said a spokesperson. “Some businesses may incur relatively little cost in moving to MTD processes, whereas others may incur costs in excess of the average. Costs and savings will vary between businesses due to factors such as business size and existing record-keeping behaviour.”

Overall, the tax authority still believes the programme will generate a positive return. In a recent estimate provided to the NAO, HMRC said it expects MTD to achieve £3.9bn in additional tax revenue by 2033-34, and stated that its research indicates that since its introduction MTD for VAT had contributed to generating additional tax revenues of between £185m to £195m.

Separate business case for MTD ITSA

The report highlighted that Making Tax Digital for income tax self assessment (MTD ITSA) is at least eight years behind its original timetable and crucial elements of its design have yet to be resolved.

These elements include a lack of large-scale pilot testing with taxpayers, how to allow for multiple agents to represent taxpayers, how to treat jointly owned property, and how to deal with changes in taxpayers’ circumstances.

The NAO labelled the current plan to implement MTD ITSA from 2026-27 for those with incomes over £50,000 as “very challenging” based on the significant work required for this to happen, including restarting its pilot with business taxpayers, moving tax systems and records, and changing its own internal processes.

“The scale of work required remains uncertain,” said the report. “HMRC’s plans still require it to simultaneously move from legacy systems to a modern platform and introduce digital record keeping by business taxpayers. It has not been able to provide us with any measures of progress to the end of 2022, so it is not clear how much its investment to date has advanced its system development.”

Wrapping up its report, the NAO recommended that a separate business case for MTD for self assessment be put together to give decision-makers clarity on the costs, benefits, and delivery risks for the full range of options.

The report also recommended that HMRC work more collaboratively with a wider range of stakeholders on how best to create the new system and resolve questions around software.

Replies (126)

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By mkowl
12th Jun 2023 08:36

Lets be honest the calibre of politicians we have in this country that would scrutinise HMRC explains why HMRC get away with everything

A sad indictment of the country all round and the media would prefer to run the story of an entitled idiot that was educated at Eton as opposed to this non sensical whim of HMRC

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By OrmeGoat
12th Jun 2023 08:36

Self assessment "helpline" closed last week. Now this.

And nothing, absolutely nothing, will change.

Welcome to the United Kingdom in 2023.

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David Ross
By davidross
12th Jun 2023 08:37

It really is looking as if the Boss' position is untenable !

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Replying to davidross:
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By jamiea4f
12th Jun 2023 09:14

No doubt he'll still get a knighthood for his "service" (of flushing a perfectly decent function down the pan)...

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By Alanpryan
12th Jun 2023 08:41

Who knew? Oh, all of us, apart from HMRC and UK Gov!

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By R Guyver
12th Jun 2023 08:42

Heads will roll.....

oh no, actually they won't. There'll be no accountability,

Its incomprehensible to be out by £1bn, and also to be out by a factor of 5

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Replying to R Guyver:
By cfield
12th Jun 2023 11:42

I don't know why they bother doing forecasts at all when they are always hopelessly wrong. Clearly they are just box-ticking exercises where wishful thinking is the order of the day. The time for the NAO to get involved is right at the start, so these hare-brained schemes can be nipped in the bud....hopefully! But there was too much political steam-rollering behind this one, with Gauke and Osborne turning the organ grinder and civil servants desperate to make their "death of the tax return" pipedream a reality, somehow or other.

The tax gap figures were always a con trick. 5 minutes on the back of an envelope would have demonstrated that, but no one ever bothered. After all, they had to justify it somehow. Just think how that £1.3 billion might have improved HMRC had it been spent wisely. All we're going to get now for that money is digital rubbish in place of paper rubbish, or even digital rubbish in place of perfectly good paper records.

The only way to change anything in this country is root and branch reform of the whole political system. For starters, all MPs should be independents. There should be no affiliation to any political party at all on the ballot paper. People should vote according to a) credentials based on what candidates have achieved in life (to be calculated by an algorithm and reflected in a Q score), and b) their political views expressed as a P score (based on their answers to hundreds of questions when they stand for election and visible to the public in an online database).

That way, you wouldn't have the febrile politics we get now, with each "tribe" slagging off the others and lying about them every way they can. There wouldn't be any parties in Parliament anymore, just individuals with their own views. You wouldn't have whips running around forcing MPs to toe the party line. In fact, it would be illegal to interfere with an MPs vote other than by the normal debating process. They might form voting blocks on certain issues but they would not be allowed to evolve into parties. They would be transient groupings such as the European Research Group with no power to influence an MP's future career.

Best of all, we would have true democracy. At present, if you don't represent a party, you have no chance of being elected. This way, everyone would have a fair chance, and the best people would get in, as most voters would go for candidates with a high Q score and a moderate P score. The fanatics, careerists and soap-box yellers would just not get enough votes, whereas at the moment all they need to do is take over the local party and then they are bound to get in. In practice, our MPs are chosen by the selection committee of the local party. The rest of us can either rubber-stamp their choice or waste our votes.

The Prime Minister should be voted for by the public in a separate election from 2 candidates put forward by Parliament. It would put a stop to accusations of being unelected if there is a change of PM midway through a Parliament and avoid the nightmare scenario of someone like JC becoming PM almost by accident (which very nearly did happen in 2017). Once elected, the PM would have the whole of Parliament to choose his/her Cabinet from, not just his/her own party, as there wouldn't be any parties in Parliament anymore.

Think about it. What right do these private clubs have to dominate our politics? Do they have any more right than say the British Interplanetary Society or Women's Institute? They should go to being social clubs with a special interest in politics. Let their members go on Sunday morning chat shows, where they can talk about the politics of the day to their hearts content, but not hold ministerial posts just because they joined that party. Give the rest of us a look-in. I'm sure we'd do a much better job.

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Replying to cfield:
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By johnjenkins
12th Jun 2023 12:01

Or you could just have a coalition.

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Replying to johnjenkins:
By cfield
12th Jun 2023 17:37

A coalition would be the worst of all worlds, with constant in-fighting and shady deals behind the scenes. A Parliament with no parties would be the exact opposite of this as there would be nobody to form a coalition with.

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Replying to cfield:
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By lionofludesch
12th Jun 2023 17:45

cfield wrote:

A coalition would be the worst of all worlds, with constant in-fighting and shady deals behind the scenes. A Parliament with no parties would be the exact opposite of this as there would be nobody to form a coalition with.

Happen you're right, but a Parliament with 650 members, all of whom are Independent, would mean that you need a coalition of 326 of them for an overall majority.

Nice idea, but in practice ......

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Replying to lionofludesch:
By cfield
12th Jun 2023 18:09

Yes but they would only argue over matters of policy that they truly believe in or out of personal animosity, not just because they belong to a different tribe.

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Replying to cfield:
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By mkowl
12th Jun 2023 16:21

You have put into much more eloquent words my own views on this topic. I trust you don't mind but I have copied and pasted this on to my Facebook page. I am no influencer so it won't circulate far sadly but it deserves more coverage

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Replying to mkowl:
By cfield
12th Jun 2023 17:28

No objections at all. No chance of any of this happening of course, as no party is going to vote for its own oblivion. Mind you, if the House of Lords is ever finally abolished, perhaps it will be replaced by a body like this, with no parties involved, and as the years go by, we will all come to recognise it as the true voice of the people, as opposed to the House of Commons, riven as it is by hatred and dissent caused not so much by opposing policies but by pure tribalism. That body might then start acting as the grown-ups in the room, only passing laws that are truly beneficial for the country and weeding out the rest of the nonsense, like MTD.

Perhaps then we might get a Government that is fully focussed on the needs of the country rather than having to constantly defend itself from attacks, both fair and unfair, a lot of them from people who don't know what they're talking about, from downright lies, exaggerations and truth-bending, mixed in with some real facts to make it all sound more plausible, and from one so-called scandal after another, much of which is just political mischief-making (how many of us really give a toss about alleged bullying, private email accounts, things allegedly said or done many years ago or enquiries on speed awareness courses - it's just pathetic really).

Not all politicians are as bad as we paint them, of course. There are many decent men and women who do want to serve the public and do the right thing for their country, rather than for themselves or their parties, but it is the parties who ruin it with their constant squabbling and factional in-fighting, and then we end up with the toxic political climate we have today, which is ironic really given that the 3 main parties seem to be getting more and more alike in policy terms.

You've only got to look at America to see what that might lead to, with a sort of cold civil war going on. Add in all the woke nonsense and a media that constantly stirs things up and plays to the gallery, and we are slowly becoming dysfunctional as a society.

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Replying to cfield:
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By johnjenkins
13th Jun 2023 09:49

So I should expand on a coalition. OK to start with there may be a settling in period but after that I think it would work. The other part, which would enhance the coalition is the abolition of the House of lords and to be replaced with a House of proportional representation. The object of this exercise is that in a very few years we will get policies that the majority (it's called democracy) of the electorate want. OK maybe the first term could be a bit of a learning curve but in the second term Government would realise their responsibilities are to the electorate not their parties. This would eventually lead to, as you pointed out, a totally independent Government.

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Replying to johnjenkins:
By cfield
13th Jun 2023 10:47

So the LibDems were right all along then. All we need is PR and then everything will be OK. Only trouble is, the electorate overwhelmingly rejected PR in the referendum forced on Cameron by Nick Clegg as the price of his support in the 2010 Coalition. Wasn't that democracy?

They rejected it because they knew that PR leads inevitably to one coalition after another, with all the attendant squabbling, horse-trading, forced compromises that don't really satisfy anyone and unreasonable demands such as referendums.

PR does not equate to true democracy because the candidates are chosen by small groups of party members and in most constituencies one of them is probably 90% certain to win. True democracy is where anyone can stand, even if they are not a party member, and have a fair chance of winning if they campaign well and have good enough credentials/politics to make people want to vote for them.

Lion says it would lead to hundreds of individual coalitions in Parliament, but is it really so hard to believe that 650 sensible men and women, unburdened by party loyalties/rivalries, might actually agree on something, or at least form a majority?

You could argue that every group of people who are in agreement on anything is a coalition. A football crowd, for instance, most of whom want the home side to win, or union members voting on whether or not to accept a pay deal. They don't have to agree on anything else or form some sort of club/party to bond together for all eternity in some sort of blood pact, de rigueur hating the other side.

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Replying to cfield:
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By johnjenkins
13th Jun 2023 11:19

You've missed the point. PR would be in addition to a coalition so that at least most of the electorate would be represented in Government as opposed to now where the majority is not (only by opposition). Of course the first term would have a "pecking order" type scenario, but after that MP's would start to "think" electorate rather than "party".
"Campaigning well" needs money. So sponsors are needed and so it goes on.

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Replying to johnjenkins:
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By lionofludesch
13th Jun 2023 11:40

johnjenkins wrote:

You've missed the point. PR would be in addition to a coalition so that at least most of the electorate would be represented in Government as opposed to now where the majority is not (only by opposition). Of course the first term would have a "pecking order" type scenario, but after that MP's would start to "think" electorate rather than "party".
"Campaigning well" needs money. So sponsors are needed and so it goes on.

Single Transferrable Vote - great fun over the water.

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Replying to lionofludesch:
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By johnjenkins
13th Jun 2023 12:14

I have to say this but don't really want to, but anything has to be better than the two party system we have at the moment. So much infighting in both parties loses the concept of what MP's are there for. You can see it spilling out into the populus.

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Replying to johnjenkins:
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By kevinringer
13th Jun 2023 12:28

PMs are paid, so they should act professionally. They're paid to run the country. I know this sounds contradictory, but there's too much politics in it. Yes I know, isn't that what parliament is all about, politics? Well should it? Isn't parliament there to run the country?

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Replying to kevinringer:
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By johnjenkins
13th Jun 2023 12:57

You're right Kevin but clearly it's not working so we need a better system.

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Replying to cfield:
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By BrianL
14th Jun 2023 12:38

But there are several different kinds of PR system, some more P and therefore more representative than others. When we voted on adopting PR only one system was offered, and not the best in the opinion of many people. Rather like Brexit, there was no intelligent debate about the merits & disadvantages of change. See https://www.electoral-reform.org.uk/voting-systems/

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Replying to BrianL:
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By johnjenkins
14th Jun 2023 13:58

You have got the hiccups bad.

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By Andy Hull
12th Jun 2023 08:44

"We haven't built any lighthouses in the Strand this year" (N. Seagoon)

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By Moo
12th Jun 2023 08:47

I wonder how many people (small businesses, landlords etc) would switch their voting intentions to labour if Starmer & Reeves promised to scrap MTD ITSA completely?
Truth is it started as a bad idea and has only got worse with time and increased costs.

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Replying to Moo:
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By mkowl
12th Jun 2023 09:30

I won't presume peoples political views but that is about #99 on my list why the current Govt needs to be banished. Whether the alternative is any better is a moot point. Is there an Anarchist faculty of the ICAEW - asking for a friend

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Replying to mkowl:
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By OrmeGoat
12th Jun 2023 09:47

Please send details if there is.

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Replying to mkowl:
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By 0098087
12th Jun 2023 11:18

You can fool some of the people some of the time, but oh hang on, we got lumbered with Brexit because Cameron listened to that Farage and then we got left with a crook for PM who still thinks he should be PM.

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By Self-Employed and Happy
12th Jun 2023 08:47

"BUT BUT BUT The Tax Gap"

Honestly, just sack off everyone within HMRC and get accountants in to run it from varying backgrounds of practice.

There is absolutely zero accountability.

When people have the attitude of not being arsed to pay tax, I always get rid of those people as clients but I used to be angry at them, now I just shrug and think what difference does it make, our politician and civil servants "pee" (swear filter friendly) it up a wall.

I stopped getting angry about this stuff a while ago, head down, earn as much as you can and run as early as you can.

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Replying to Self-Employed and Happy:
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By philaccountant
12th Jun 2023 09:49

I doubt they pay enough. This is another consequence of austerity. You slash the budget of a functioning department and promote anyone that will sell you a pipe dream of efficiency gains.

The guy that gets the top job is the one who when the minister asks "Which one of you can bring in more tax whilst we slash your budget?" says "Of course we can do more with fewer resources."

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By Ben Alligin
12th Jun 2023 08:48

This looks like money laundering to me, should we not all be filing SARs?!

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By johnthegood
12th Jun 2023 08:49

And at the same time we have seen service levels at HMRC at the lowest I can remember in 25 years in this game, I wonder what those billions could have done for the UK if they had been invested in staff instead of systems, or at least in systems that make things better not worse.

And still, the HMRC response is that it's all going to plan, it's absolutely crazy, and any professional or PB that goes along with this is culpable.

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Replying to johnthegood:
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By mkowl
12th Jun 2023 09:00

Nail on head, perhaps the professional bodies are too close via the links with the Big 4 and lucrative Govt contracts to make too many waves. I guess they are not going to trumpet blow for the National Audit Office as its in many ways competition.

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By listerramjet
12th Jun 2023 08:51

The thesis that MTD would magically increase tax revenues was always flawed!

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By Catherine Newman
12th Jun 2023 08:54

Why now? 8 years too late.

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By RobertD
12th Jun 2023 08:55

Who would’ve guessed?

To put a positive spin on it’s a raging success compared to the digitisation of the NHS and HS2.

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By listerramjet
12th Jun 2023 08:56

The complexity of our tax system was always going to make “digitisation” impossible. Even the basic calculations are challenging.

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By JohnB
12th Jun 2023 08:57

Gareth Davies says the delays to MTD have undermined the programme's credibility and put at risk the support of taxpayers.

He needn't have worried.

The programme had neither credibility nor the support of taxpayers.

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By BrianL
12th Jun 2023 09:01

"We also know …there are significant benefits available in the future,” said a spokesperson. “Some businesses may incur relatively little cost in moving to MTD processes, whereas others may incur costs in excess of the average. Costs and savings will vary between businesses "

Well, how profound! Has the spokesperson only just discovered that it's in the nature of an average that there will be numbers higher than the average as well as numbers that are lower. And that there will be variation between businesses.

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Replying to BrianL:
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By philaccountant
12th Jun 2023 09:55

Would be interested to see them point to a single saving made by a business because of MTD. All of the things being mandated by HMRC:

Digital links
Electronic record keeping
Quarterly tax position updates
Change to your basis period

Can already be done voluntarily. Those that choose to do these things are already paying for them, so no saving for them. Just another submission to either make themselves or pay their accountant to.

That people tend to choose not to do these things, as the increased costs outweigh the benefits, tells you all you need to know about any potential savings. There are none.

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Replying to BrianL:
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By Homeworker
12th Jun 2023 11:42

BrianL wrote:

"We also know …there are significant benefits available in the future,” said a spokesperson. “Some businesses may incur relatively little cost in moving to MTD processes, whereas others may incur costs in excess of the average. Costs and savings will vary between businesses "

Well, how profound! Has the spokesperson only just discovered that it's in the nature of an average that there will be numbers higher than the average as well as numbers that are lower. And that there will be variation between businesses.


..and of course it is the smallest businesses who will incur, proportionally, the largest costs, since they will potentially have to invest in hardware and software, which the larger businesses will already have.
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By Farrukh999
12th Jun 2023 09:04

Will this be another fiasco like the Post Office Horizon system not tested properly and the individual made to pay for the mistakes of a system that was designed and implemented by an IT company that has links to the government cronies and no accountability.

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Replying to Farrukh999:
Tornado
By Tornado
12th Jun 2023 12:15

Oh I feel sure MTD will be tested thoroughly, after all there were 400,000 people/businesses in the pilot .................... oh hang on, that was the number of people that HMRC said would be in the Pilot, but in practice, they ended up with just 9 people/businesses taking part.

I think HMRC must have then resorted to a group hug and big wish and really believed that this would make the second Pilot work much, much better ............ surprisingly it didn't.

https://www.rossmartin.co.uk/self-employed/making-tax-digital/3304-mtd-i...

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Replying to Tornado:
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By kevinringer
12th Jun 2023 13:11

I attended a HMRC meeting in 2016 when HMRC said they were confident that 400,000 would sign up for the pilot. We agents asked why anyone at all would sign up. HMRC said droves would sign up because MTD would save so much time and effort compared to normal accounting/reporting. The clue to why HMRC had reached this conclusion was that none of the HMRC people hosting the meeting were tax people: they were all IT people who admitted they knew nothing about accounts, nothing about business, and nothing about tax. And that's been the problem with MTD. The medium of SA was originally paper. Asking IT people to build MTD is like asking printers to design SA. The fact that so few people signed up to the pilot back in 2017 should have rung alarm bells in HMRC. Why didn't it?

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Replying to kevinringer:
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By lionofludesch
12th Jun 2023 13:25

kevinringer wrote:
Asking IT people to build MTD is like asking printers to design SA.

A fair analogy.

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Replying to kevinringer:
Tornado
By Tornado
12th Jun 2023 13:44

" The fact that so few people signed up to the pilot back in 2017 should have rung alarm bells in HMRC. Why didn't it?"

It probably did ring a few bells but when you are part of a group acting as one with no individual taking responsibility for the many, you can ignore those bells with impunity. Anyway, the jobs (and perks) were probably paid well, so why worry about what is perceived to be someone else's problem .... and there is always that pervasive whiff of arrogance with HMRC where they think they know better than any of us anyway.

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By ireallyshouldknowthisbut
12th Jun 2023 09:08

Good to know HMRC are getting under financial pressure on this.

For VAT, all we got was the replacement of one online method of filing VAT returns...........with another online method for filing VAT returns. Virtually the same at the user end, except the requirement to buy 3rd party software to use it, and there seems to be less functionality under the new system in many places, and no real improvements. Eg basic changes such as adjustments still cant be made to a return, for no reason other than no-one bothered to spec it.

This hopefully means they will abandon the replacement with the SA return which is a hugely complex and so dwarfs by factor of about 200 the VAT project. With no SA return, quarterly reporting looks even more pointless than it is already.

This actually gives HMRC a really good reason to abandon the project without to much 'losing face' for the senior bods who have commited to it. ie blame lack of funding, father than their own incompetence for the projects failure.

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Replying to ireallyshouldknowthisbut:
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By Farrukh999
12th Jun 2023 09:36

And the civil servant would get a promotion to another department and mess that up as well.

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Replying to ireallyshouldknowthisbut:
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By johnjenkins
12th Jun 2023 09:50

Yet HMRC are saying the changes to the VAT system has reduced errors and allowed business to grow more effectively. There seems to be a sales training pitch that links MTD with error reduction so more time spent on growing business. However only HMRC have been conned by the sales pitch. We haven't.

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Replying to johnjenkins:
By ireallyshouldknowthisbut
12th Jun 2023 10:12

johnjenkins wrote:

Yet HMRC are saying the changes to the VAT system has reduced errors and allowed business to grow more effectively. There seems to be a sales training pitch that links MTD with error reduction so more time spent on growing business. However only HMRC have been conned by the sales pitch. We haven't.

Except it hasn't, has it? I think errors seem bigger now than before as there is the tendency to "add VAT to the lot". HMRC when doing VAT audits only ever look at the larger figures, so miss all the fudged Amazon marketplace stuff and small traders who are in a "stad VAT" category but not actually registered themselves..........which you only find out by looking at the invoice not coding from the bank account without looking.

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Replying to ireallyshouldknowthisbut:
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By johnjenkins
12th Jun 2023 10:51

I have found that with increasingly high tech (to us MTD isn't high tech) consumers including a lot of small business get confused, so yes errors will increase and the people don't realise they are making errors.

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