Tax department has revealed the results of an initial ‘screening’ exercise, including a conclusion that a full assessment is not required, but that it will continue to monitor the situation
As hundreds of thousands of citizens face new requirements to use HM Revenue and Customs’ digital tax platform, the department has revealed the results of an equality impact review that identified potential barriers for users based on factors including disability, age, and religion.
But HMRC has pledged that its mitigations will constitute a package of “comprehensive support” for those in scope of the new digital regime. In light of which, the department has concluded that, following an initial screening, “a full Equality Impact Assessment is not recommended”.
As of the start of this week, about 800,000 self-employed people and landlords are now required to make income tax self-assessment submissions via the Making Tax Digital (MTD) regime. Doing so will require the use of a third-party software platform accredited by HMRC as compatible with the incoming digital tax system.
Two further tranches of taxpayers – each comprising almost a million people – will be mandated to adopt MTD in 2027 and 2028, respectively.
As trade bodies representing freelancers warn the department about “frustration” and “uncertainty” among their members concerning the tax digitisation initiative, HMRC has now published a Screening Equality Impact Assessment for MTD for Income Tax. The document – and the screening exercise it details – is intended “to demonstrate that equality considerations are key in decision-making processes” related to the department’s services.
The first finding of the equality assessment is that “there is no evidence to suggest any specific impacts on customers within the following protected characteristic groups: race; sex; gender reassignment; sexual orientation; pregnancy and maternity; marriage and civil partnership; [and] political opinion”.
“Some customers from certain religious groups may be disproportionately represented in the self-employed or landlord populations, [and] some religions can potentially limit when or how customers can interact with HMRC services.”
HMRC equality screening
Despite the lack of a clear impact, HMRC states that it is “committed to providing a range of support, as safeguards, to ensure that customers within those protected characteristic groups who may face difficulties are properly supported”.
These measures will include dedicated advisory helplines, as well as an “Extra Support Team for those who need additional help”. The department will also offer the likes of online help and guidance provided via the HMRC App, as well as a dedicated GOV.UK campaign website, and a series of webinars and explanatory webinars.
‘Capability and confidence’
For all other types of protected characteristics, “our assessment identified minor impacts”, according to the HMRC document.
This includes people with disabilities, whom the department acknowledges “may face challenges using digital services, particularly those who rely on screen readers, assistive technology, have lower digital capability, or have limited access to suitable devices or internet connectivity, [while] customers with lower literacy or numeracy skills may also face additional barriers”.
To mitigate these potential difficulties, HMRC will ensure the availability of “a wide range of accessible commercial software options, including products designed for visual, cognitive, hearing and motor accessibility needs”. The department further commits to “offering reasonable adjustments, including alternative formats such as braille, audio and large print, and ensuring content is screen-reader compatible”. The screening document also reiterates the provision of “a digital exemption route for customers whose disability prevents them from using digital services”.
The equality assessment found potential negative impacts based on age, as “older customers are more likely to be represented in the landlord population and some may have lower digital capability or confidence using software”.
Mitigations for these challenges again include the digital exemption, as well as “ensuring alternative contact routes remain available, with assisted digital support, telephone help and access to extra support where appropriate” and “working with operational teams to ensure staff understand where additional support may be needed for older or less digitally confident users”, according to HMRC.
In assessing the possible effects based on taxpayers’ religion or other beliefs, the department finds that “some customers from certain religious groups may be disproportionately represented in the self-employed or landlord populations”.
The screening adds: “Some religions can potentially limit when or how customers can interact with HMRC services. Some religious groups follow rules related to computer use that may affect access to digital services.”
To mitigate these impacts, the department asserts its commitment to “providing 24/7 digital access, allowing customers to use MTD services at times compatible with their religious practices”.
Other mitigations, once again, include “clear, accessible guidance through GOV.UK, the MTD campaign page and multichannel communications”, as well as additional support through dedicated staff and, where necessary, exemptions from the mandatory digitisation programme.
Another group that may be impacted by MTD includes “customers with caring responsibilities, [who] may rely on others to help manage their tax affairs and may need flexible ways to access and use MTD services, [while] some customers acting on behalf of others may also require secure routes to support the completion of obligations”.
To mitigate these barriers, HMRC is “allowing customers to appoint main agents or supporting agents, providing flexible options for those who need assistance with their MTD obligations”. The provision of additional support, round-the-clock access to services, and digital exemptions will also help to protect against any potential negative impact, according to the department.
56
Number of software tools accredited for MTD income tax submissions
11
Number of tools available to users for free
£50,000
Annual earnings threshold for joining MTD this year – a figure which will be lowered to £30,000, then £20,000 in the next two years
2.725 million
Taxpayers who will be required to adopt MTD for income tax by April 2028, including 780,000 this year
Finally, the assessment notes that “some customers may face language barriers when interacting with MTD for Income Tax, [which] includes customers who use British Sign Language, those who speak English as a second language, and customers who require services in Welsh; these barriers may affect their ability to understand guidance and complete their obligations”.
In light of such challenges, HMRC will ensure “access to translation and language services”. This includes working with interpreting and language specialist firm thebigword, and the department’s own specialised Welsh Language Unit.
The tax agency will also be “working with software developers to ensure that software caters for a wide range of needs [and] working with organisations such as the Royal Association for Deaf People to co-develop support material for BSL users and those who do not use English as a first language”.
Recommendation and review
In a concluding section of the screening, HMRC details how the digital tax rollout could provide “opportunities to promote equalities”.
“We are working with representative bodies, voluntary and community organisations, and accessibility groups to ensure MTD for Income Tax meets diverse customer needs,” the document says. “Through co‑design sessions, software‑industry engagement and structured stakeholder forums, we are involving organisations that represent older people, disabled customers and those needing extra help.”
Following the completion of the screening – which represents the first-stage of the process for ensuring equality of access to government services – HMRC has determined that “a full Equality Impact Assessment is not recommended” currently.
PublicTechnology understands that – given that the screening identified only minor impacts, with sufficient mitigations – the department considers that a full assessment would not be proportionate to the scale of the challenges. However, as the implementation of MTD continues, any unforeseen impacts on various user groups will be monitored on an ongoing basis.
In response to our enquiries, an HMRC spokesperson said: “Making Tax Digital will make it easier for sole traders and landlords to get their tax right by providing a more real-time overview of their finances, freeing up their time to focus on growing their business. We have put comprehensive support in place for Making Tax Digital customers and continue to keep equality impacts under review.”
