Latest Public Sector News

22.09.16

‘Major’ HMRC digital changes face delays in light of leftover concerns

HMRC’s plans to implement the Making Tax Digital (MTD) plan may need to be delayed to ensure a proper consultation, the chair of the Treasury Committee has said.

A letter to chancellor Philip Hammond from Andrew Tyrie, the chair of the Treasury Committee, confirms that the Treasury wants to finish the consultation on Making Tax Digital by 7 November.

This would allow the draft Finance Bill clauses to be published at the end of November and the bill to go through Parliament next year.

However, Tyrie said: “HMRC's proposals are major changes.

“There remains considerable cause for concern with the proposals. Better to get it right than to stick to a rigid timetable.”

Under the proposals, businesses and individuals will have to submit quarterly updates on their taxes. Tyrie warned that this could place a burden on small businesses by requiring them to hire an accountant four times a year.

Businesses have also told the committee that they are concerned about the changes because they introduce stricter requirements for how accounts should be submitted.

The proposals include free digital tools to help small businesses with the changes, but it is not clear which businesses can use these or how long they will be available for.

Tyrie also warned that it is not clear how these updates will align with the monthly updates required for the Universal Credit scheme.

He argued there could be a case for delaying the implementation of MTD altogether in order to allow time for a meaningful consultation, instead of introducing “a year's extension for an unspecified group of businesses”, or piloting the changes.

HMRC is planning to cut its personal tax staff by 34% despite previous staff cuts having caused much longer waiting times. It has justified this by saying it can boost the role of digital services.

Separately, plans to replace HMRC’s Aspire IT system with Capgemini have also been rated ‘amber/ red’ by the Infrastructure and Projects Authority.

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