Question to the HM Treasury:

To ask His Majesty's Government, further to HMRC Government Major Projects Portfolio Data March 2024, published on 16 January, how they have revised their estimated monetised benefits for the Making Tax Digital programme from £2.1 billion to £6.3 billion in the most recent Annual Report; and what methodology changes were applied to account for this increase.

Making Tax Digital (MTD) is key to tackling parts of the tax gap that result from error and failure to take reasonable care, and it is helping taxpayers reduce common mistakes in their tax returns. The benefits increase is mainly due to new and improved data.

In particular, the model was updated to better account for projected increases in customer income which increased the expected number of individuals within the scope of MTD for Income Tax. It also reflects HMRC’s increased estimate of the proportion of the Self Assessment tax gap attributable to error and failure to take reasonable care which were included in the ‘Measuring tax gaps 2023 edition’ publication. Updates also incorporated findings from a published evaluation study on the impact of MTD on VAT.

Estimates will continue to be updated as new information and insight becomes available.