In a report on MTD, the Public Accounts Committee (PAC) warned that HMRC is increasing the burdens imposed on some taxpayers with MTD rather than simplifying the tax system, describing the system as ‘making tax difficult’.

‘Without a rigorous focus on what will make the tax system easier for everyone there is a risk that the planned changes will add further complications rather than simplify it,’ the PAC report stressed.

Modernising the tax system also presents IT challenges to HMRC around data management.

HMRC told MPs it expected that at least 30% of its self assessment taxpayer records would need manual work in order to ensure taxpayer data was moved to the new system correctly.