Behavioural reporting noise in digital tax administration: Compliance signal distortions under the UK making tax digital for income tax regime

Digital tax reforms that increase reporting frequency alter not only the reporting frequency of taxpayers but also the behavioural conditions that produce compliance information. This paper introduces behavioural reporting noise (BRN), defined as systematic distortions of reported compliance signals generated by adaptation to a reporting regime rather than underlying noncompliance. Using MTD-ITSA as a motivating example, the paper develops a theoretical framework around three mechanisms: compressed categorisation under deadline pressure, precautionary underclaiming under uncertainty, and misalignment between quarterly submissions and annual declarations.