Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment has the Treasury made of the efficacy of introducing a price-cap on software to be used under the Making Tax Digital for Income Tax regime.

The Government expects software compatible with Making Tax Digital (MTD) for Income Tax Self-Assessment to be available at a range of prices, as we have seen with software for MTD for VAT. We have committed to free market-provided products which meet customers’ basic MTD needs. Many software options will combine MTD for Income Tax Self-Assessment functions with other tools, such as invoicing, giving businesses the opportunity for wider digital benefits.

For MTD for VAT, software developers are currently providing 22 free products, supporting the smallest businesses and landlords with straightforward affairs. HMRC has liaised extensively with the software market to ensure a range of software products, which includes affordable and free options, are made available to businesses. Some software providers have also indicated that current MTD for VAT software is likely to be upgraded for free for MTD for Income Tax Self-Assessment.