Making Tax Digital: An Evaluation of the VAT Service and Update on the Income Tax Service

This document describes an evaluation of the Making Tax Digital (MTD) initiative for VAT, a key component of the UK government's strategy to create a more efficient digital tax system. The goal of MTD is to minimize errors and the tax gap through compulsory digital record-keeping and tax filing. The evaluation employed various methods, including stakeholder feedback, pilot programs, and customer research. Findings show that over 1.4 million businesses have adopted MTD for VAT, experiencing benefits such as error reduction and increased efficiency, although some encountered challenges with setup and software selection. HMRC has taken steps to address these issues by enhancing support and expanding the software market. The evaluation suggests that MTD for VAT is largely successful, but offers insights for future implementations, including the forthcoming MTD for Income Tax. The document highlights the importance of extending MTD to achieve its full potential, with businesses reporting low costs and time savings, and an expected £1.2 billion tax revenue increase by 2023-2024. **This summary was written by an AI model and therefore should not be considered a definitive summary of the report. If you are aware of inaccuracies, please email evaluation.registry@cabinetoffice.gov.uk.**

Description

• Lead department: HM Revenue & Customs (HMRC)
• Evaluation stage: A complete evaluation report
• Other departments: No other departments listed
• Evaluation types: Process evaluation
• Process methods: Individual interviews
• Grant information: This intervention is not distributing funding via a grant
• Government Major Project information: This intervention is not a major project
• Policies: No policies provided

Event Dates

• Event Name: Publication of final results
• Event date: March 2020

Evaluation Costs

• Cost: Not provided

Evaluation sharing

• Link(s) to published report(s): Yes
• Links to evaluation plans: No link provided
• Findings: Not provided
• Permission to share confirmed: Yes