Research to quantify agents' awareness and understanding of Making Tax Digital for Income Tax Self-Assessment

Description

We need to commission external research from an agency to carry out this project on behalf of HMRC. This will comprise of them carrying out research interviews with agents, analysis and delivering their findings to support policy objectives and deliverables. This is a Social Research contract intended to be let through Research Marketplace. MTD is a key ministerial priority for HMRC. In July 2020, the Chancellor announced the extension of MTD to two new customer groups - VAT registered businesses (with turnovers below £85,000) from April 2022 and ITSA businesses from April 2023 - meaning over 1 million VAT registered businesses and 4.2 million ITSA businesses will be brought into MTD by April 2023. Agents will play a crucial role in supporting their clients with MTD, however, there have been indications that smaller agencies have been completely focussed on helping their clients survive during the pandemic and they have not fully taken on board these new mandation dates. This research will track agents' awareness of the changes as deadlines approach and will identify support needs to help them prepare themselves and their clients for MTD On strategic fit: MTD is a key element of HMRC's published 10 year strategy to develop a modern, digital tax service. This research will enable HMRC to understand any shortfalls in agents' awareness of MTD rules and upcoming deadlines (including whether communications about deadlines are effective). The results will inform HMRC's transitional support activities by providing a picture of the needs of agents with different characteristics: size / experience of MTD / level of professional / external support. Many agents will need to prepare their own businesses for MTD as well as help their clients adopt the MTD rules. Agent support and advocacy for MTD is crucial for ensuring the success of the policy. If the research is not done now, HMRC will lose the opportunity to take targeted action to provide further support to those agents whose VAT clients need to sign up next year and help them prepare their ITSA clients for mandation in 2023. Given many agents remain unconvinced about the wider benefits of MTD for ITSA, it is also sensible to have an early view on agents' attitudes to the extension of MTD to new customer groups and establish what can be done, in practical terms, to support those agents with their clients as they prepare for MTD.