MTD Is A Costly Failure

 

In a recent appearance before a committee of MPs, the hapless and hoepless HMRC chief executive Jim Harra admitted that HMRC had underestimated the scale and complexity of the Making Tax Digital (MTD) scheme. This has led to multiple delays and a budget overrun of more than £1bn.

MTD is an HMRC initiative that aims to move the UK tax system into the digital age. Under MTD, businesses and self-employed individuals are required to keep digital records of their income and expenses, and to submit quarterly updates to HMRC using approved software.

HMRC originally estimated that MTD would cost £226m to implement. However, the cost has now spiralled to over £1.3bn. This is due to a number of factors, including the complexity of the system, the need to upgrade HMRC's IT infrastructure, and the fact that many businesses and self-employed individuals have struggled to adopt the new system.

The delays to MTD have also been significant. The scheme was originally due to be rolled out in 2019, but this has been pushed back several times. The latest estimate is that MTD will not be fully implemented until 2026.

The problems with MTD have led to criticism from businesses and self-employed individuals. Many people have complained that the system is too complex and expensive, and that it has not delivered the promised benefits.

In his appearance before the MPs, Harra acknowledged that the government had made mistakes with MTD. He said that the scheme was "more complex than we thought" and that "we underestimated the challenges".

Harra said that HMRC is now working to address the problems with MTD. He said that HMRC is "committed to making MTD work" and that the scheme will "deliver real benefits for taxpayers".

However, it remains to be seen whether MTD will be able to overcome its current problems and deliver on its promises. The scheme has already been delayed and overspent, and it is unclear whether businesses and self-employed individuals will be able to adopt it on a widespread basis.

The fact is that HMRC has screwed this up big time, and there is no way of God's earth they will get this monstrosity working. As such, we can expect more billions to be wasted before soemone finally pulls the plug.

In the meantime Harra really, really, really should resign!

Tax does have to be taxing.

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