HMRC reviewing priorities in Making Tax Digital programme

HMRC is currently reviewing its priorities on what has been described as ‘the biggest organisational change programme in Europe’, which could see the department delaying or deferring work on some projects after Brexit added 40% to its workload

Giving evidence to the public accounts committee (PAC) inquiry into HMRC’s performance in 2016/17, HMRC CEO Jon Thompson said the tax authority currently has 15 major programmes with a portfolio of 250 projects.

‘You have to look at the sheer scale of the change programme. It’s the biggest organisational change programme in Europe with a £2.1bn investment from the previous chancellor.

‘We have had discussions with major international bank which is going through the same kind of thing, but in sequence, not in parallel so they are not trying to do everything at the same time.

They are saying they will complete the transformation in eight years, but in HMRC we are saying we will do it in five,’ Thompson said.

Challenged by MPs on the committee, Thompson said the programme would be lower risk if it was elongated, with results delivered in stages, and he acknowledged the ‘sheer volume of technology changes the programme brings’.

Thompson’s views on the assumptions made in 2015 about how customer demands would reduce because of the switch to digital working were that these were ‘extreme’ and ‘highly aggressive’, although there has been an 8% reduction in telephony contacts so far.

He indicated that HMRC is now in discussion with government about re-prioritising the transformation programme, a process which is likely to take ‘a few months’.

‘It’s not credible to continue with the transformation programme as it is and deliver all 250 projects at one time, not with the additional workload of 40% to 50% because of Brexit and responding to fiscal changes in the Budget,’ Thompson said.

HMRC’s current estimate for efficiency savings is now put at £707m by 2020 against a target of £717m. Thompson said this would be achieved in part by finding additional savings from re- development of regional centre office space and also by ‘slowing down some digital investment’.

Whilst he specifically said investment in replacement systems for the current child benefit platform is likely to be deferred, Thompson would not comment on potential changes to Making Tax Digital plans ahead of the Budget later this month.

CCH Daily