HMRC is 'Making Tax Difficult' for taxpayers as Making Tax Digital (MTD) adds to
the burdens they face, according to a report by the Public Accounts Committee
(PAC).
The report says that HMRC has lost sight of the need to put taxpayers at the
heart of changes to the tax system.
The PAC says that HMRC is increasing the burdens imposed on some taxpayers
through the MTD initiative. It said that in seeking further investment in MTD,
HMRC has not been transparent enough about the 'substantial costs' MTD
will impose on many taxpayers.
According to the Committee, the design of MTD fails to take into sufficient
account the realities facing business taxpayers and agents.
It said that while MTD will 'substantially benefit' HMRC by improving
its systems, taxpayers are asked to spend more and do more in order to be
compliant.
The report revealed that HMRC excluded more than £2 billion in upfront
transitional MTD costs for taxpayers from its 2022 and 2023 business cases for
the scheme. It also found that 'widespread and repeated' failures in
HMRC's planning, design and delivery of MTD have led to increased costs and
delays to the initiative.
Meg Hillier, Chair of the PAC, said:
'When reporting on proposals for digitalising the tax system, our committee
should not have to be recommending that HMRC start with what taxpayers need
– in an ideal world, one would hope this would simply go without saying. But
seven years and £640 million into the MTD programme, we are concerned HMRC
is also succeeding in making tax difficult.'
Internet link: Parliament website