Taxation: Electronic Government
The question
To ask the Chancellor of the Exchequer, with reference to the Answer of 8 July 2025 to Question HL8787 on Taxation: Electronic Government, for what reason the functionality of HMRC IT systems does not allow taxpayers to submit their Making Tax Digital reporting requirements for income tax through their online (a) personal and (b) business tax accounts.
Answered by Dan Tomlinson
Making Tax Digital (MTD) for Income Tax requires users to use software to keep digital tax records, submit quarterly updates of income and expenditure and submit a tax return. HMRC’s Personal and Business Tax Accounts are not able to provide this level of functionality and ensuring that the software is digitally linked directly to a taxpayer account helps users avoid the errors that could occur when transposing figures manually.
The government is encouraging a thriving third-party software market to support the diverse range of business that will be using MTD. This will deliver flexible and tailored ways for users to manage their tax affairs, including integration with other business software and management tools as well as free and low-cost options.
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