PublicEye
ANALYSIS
Making Tax Digital is at a turning point
Adam Harper outlines what HMRC needs to do in the wake of the Public Accounts Committee’s damning report
In November, the Public Accounts Committee (PAC) issued an update on the progress of HMRC’s flagship policy, Making Tax Digital (MTD).
The report lays out the committee’s disquiet over the development and deployment of the latest iteration of MTD, which focuses on Income Tax for Self Assessment (ITSA) and VAT. The committee asks that HMRC:
- urgently test that its existing plans are sufficiently detailed and rigorous;
- specify in detail how it will hold senior leaders accountable for delivering against the programme’s timetable and budget;
- work with its programme stakeholders including customers, tax agents and software providers to resolve design issues;
- and, by summer 2024, undertake and publish a robust assessment of how much difference to tax revenue is made by (i) more frequent submissions of self-assessment data and (ii) by digital submissions.
From AAT’s viewpoint, the progress of the MTD programme is disappointing. We have staunchly supported MTD and its objectives.
That said, we also expressed concern about the timescales for delivery from the outset, something we reinforced in the evidence we submitted to the PAC inquiry.
This is compounded when taken with the PAC’s view that the programme is in fact running counter to the principle of tax simplification and is instead creating confusion and complexity.
There must be no further delays to the process, and HMRC should set a definitive timeline for implementation.
There is still time to save MTD. There are a lot of stakeholders invested in its success, and a lot of resources are ready to be deployed. HMRC must now deliver the project.
We want to hear from you
If you would like to contribute your expertise to our policy work, please contact: adam.harper@aat.org.uk.
Finance suffers from language barrier
AAT research showing a financial language barrier continues to spark debate
AAT research uncovers financial word salad
Breaking down the financial language barrier remains a major focus for AAT, and the need for greater upskilling has been covered in newspapers including the Sunday Express. AAT’s research found more than half of UK finance workers are confused by financial terminology at least once a week, while 45% had witnessed serious errors due to misunderstandings. More than half (57%) wish it was easier to discuss gaps in financial knowledge with their colleagues or managers; 54% wish their workplaces provided better resources.
AAT publishes 2023 pay gap data
AAT remains as committed as ever to equal pay, and to that end it has published its latest gender and ethnicity pay gap reports. Both reports are based on hourly rates of pay at the snapshot date of 5 April 2023. Key findings from the reports include:
- The mean gender pay gap has increased from -0.2% in 2022 (when it was in favour of women) to 3.1% in 2023, and the median gender pay gap rose from 9.8% in 2022 to 17.3% in 2023.
- The mean ethnicity pay gap increased slightly to 25.3% in 2023, up from 24% in 2022. The median ethnicity pay gap rose from 23.6% in 2022 to 25.6% in 2023. AAT is already taking steps to reduce these pay gaps. This includes developing a specific action plan to support recruitment and progression of ethnic minority staff to more senior grades, implementing a new HR system with name blind recruitment to AAT for the first time and recommitting as signatories of the Women in Finance Charter.
Pressure ramps up on AML supervision
Government plans to overhaul AML supervision remain a critical focus on AAT’s agenda. AAT, along with 12 other accounting bodies, made representations to Lords Treasury minister Baroness Joanna Penn (pictured), detailing our concerns. The letter was reported by the Financial Times, amplifying AAT’s conviction that three of the four proposals come with major risks to the UK’s oversight of AML.
Signatories to the letter wrote that many of the options “carry with them significant risks which at best could see money laundering grow and at worst see the whole supervisory regime collapse”. The consultation response is due in early 2024.
