HM Revenue and Customs rollout of Making Tax Digital (MTD) has generated over £223m in extra tax revenue to date, according to a recent update published by the government department. The figure is some £30m more than its anticipated target of £195m.
Officials at HMRC are also hoping that its Making Tax Digital vision could generate twice that amount in the next 12 months, despite some areas of the programme’s rollout having been delayed or suspended.
Up until the end of March 2020 the tax collector has pulled in £108.5 in extra revenue from individuals. And now that Making Tax Digital for VAT has come into effect for 2019/20, online tax collection from businesses has produced an additional 115m, taking revenues collected from MTD over the last four years to in excess of £223m.
An increasing number of UK citizens are taking their personal tax accounts online, with the figure now up to 22.6 million, having risen from 9.4 million just three years ago. Alongside boosting tax collection efficiency, HMRC also hopes to cut costs by reducing its 40,000 plus staff numbers and slimming down the number of offices it has around the country.
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Making Tax Digital has been designed by the UK government to make it easier for individuals and businesses to stay on top of their tax affairs. The more advanced tax administration system is aimed at moving HMRC’s services online allowing taxpayers to largely take care of their own financial affairs.
However, MTD has suffered numerous setbacks, including the scrapping of HMRC’s Compliance for the Future scheme along with being hampered by technological challenges and Brexit. Nevertheless, alongside the Making Tax Digital scheme HMRC has still managed to exceed its overall compliance targets during the course of the last four years, including £37bn for 2019/20, which was over 2.5bn more than anticipated.
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