Accounting and tax professionals have been patiently waiting for HMRC’s response to its consultation on Making Tax Digital (MTD), a proposed mandatory roll-out of the digitisation of the tax system that would encompass the vast majority of businesses in the UK.

With the publication of the Treasury Committee’s own report, the reason for the delay now seems clear.

The Treasury Committee’s report is a broadside to the Chancellor and HMRC, roundly criticising the implementation plans for (MTD). While they re-affirm support for the principle of digitising tax – a direction of travel that is almost universally supported – they:

  • call for implementation to be deferred
  • request that the roll-out is piloted and tested thoroughly – instead of the proposed ‘big bang’ approach
  • make recommendations for narrowing the scope, including raising the introductory threshold and making generous allowances for the ‘digitally excluded’
  • perhaps most surprisingly, call for the whole process to be voluntary, not mandatory, as planned by HMRC.

Criticism of the HMRC’s business case is also made:

  • the Committee questions the promised revenues to the Exchequer arising from reduced errors
  • the ability to deliver savings to business is questioned due to the lack of readiness of software to support the roll-out.


It would be difficult for the Treasury and HMRC to ignore the serious warnings laid out in this report, coming as it does from such an influential and well-informed Parliamentary select committee.  We shall await HMRC’s response this month with much interest!

The link to the Treasury Commitee’s report is <HERE>.


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