Multi-tasking blunder leaves UK tax digitization plans 3 years late, 5 times over budget
A decision to ride two horses at the same time left the UK tax collector's plans to go digital with a three-year delay and a budget bursting from £226 million to £1.3 billion.
This is according to public spending watchdog, the National Audit Office , which found His Majesty's Customs & Revenue introduced a flaw into its plans to digitize tax collection by ignoring proposals to sequence two of the most difficult elements of the gargantuan program: digital record keeping for business taxpayers and replacing legacy systems.
"HMRC therefore proposed to do both at the same time. HMRC did not fully assess the scale of work required at the outset of the Making Tax Digital programme, or the additional complexity of introducing digital record keeping for business taxpayers at the same time as replacing its legacy systems," the report said.
However, HMRC estimated that improved processing of VAT through the scheme led to additional revenue of between £185 million and £195 million in 2019-20. Launched in 2016 with a budget of £226 million, MTD planned to modernize HMRC's systems for VAT, income tax self-assessment and corporation tax. It required business taxpayers to keep and submit quarterly digital tax records. HMRC also intended to move its tax systems and records onto a modern tax management platform by 2020.
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