The Public Accounts Committee (PAC) has challenged HMRC on the governance and accountability of the Making Tax Digital (MTD) initiative.

MPs in the PAC have called for HMRC to reconsider its response to the PAC’s concerns regarding MTD. Writing to HMRC’s Managing Director, Jim Harra, Meg Hillier, Chair of the PAC, requested additional information on how HMRC intends to address MTD issues highlighted in the PAC’s report on the initiative, which was published in November 2023.

Ms Hillier called for HMRC to outline what it is doing differently to ensure MTD processes work more effectively than they have in the past. The PAC has also urged HMRC to carry out a ‘robust assessment’ of how frequent submissions of self assessment information and digital submissions will affect HMRC’s tax revenue.

In the letter, Ms Hillier commented: ‘You have not attempted to demonstrate consideration of further robust testing of the financial information underpinning your programme, for example, controlled behavioural experiments to ascertain the difference that more regular filing can make to the accuracy of returns. VAT returns were already provided quarterly and cannot provide this assurance.’

HMRC said that it intends to ‘ensure that it strikes the right balance between ensuring competition, quality and access to software for its MTD for VAT and self-assessment customers’.