Parliament sets date for quarterly tax update debate
A controversial proposal that could see small business owners forced to update their tax bill four times a year will be debated in parliament next week, after an online petition was signed by more than 100,000 people.
The parliamentary petitions committee, which handles online petitions, has scheduled a debate on ‘quarterly tax returns’ for the afternoon of the 25th of January.
Small business owners reacted angrily when the proposal was first announced by Chancellor George Osborne at his Autumn Statement. To vent frustration, business owner Paul Johnson started an online petition that has since been signed by over 107,000 people.
Mr Johnson protested the extra administrative and financial burden that quarterly returns could mean, both for his business and others like it.
He wrote: “Each self-employed individual and small business will have the added burden of additional red tape, accountancy fees and potential for fines. As a small business owner myself I already spend quite some time to get things in order once s year.”
He continued: “At the moment we pay £1200 a year in accountancy fees this figure will greatly increase. The conservatives are not working for small businesses in brining such legislation but adding burden.”
In their official response to the petition, HMRC said that quarterly updates will be much easier to complete than traditional tax returns.
A spokesperson said: “Making Tax Digital will not mean ‘four tax returns a year’. Quarterly updates will largely be a matter of checking data generated from record keeping software or apps and clicking ‘send’.
“These reforms will not mean that businesses have to provide the equivalent of four tax returns every year. Updating HMRC through software or apps will deliver a light-touch process, much less burdensome and time-consuming than it is today.”
Jon Biddle, Group Chief of Operations at Umbrella.co.uk welcomes some of HMRC’s proposals but he still has some reservations about the new technology.
He said: “I think the government is under the impression that just because they are moving tax collection online it will automatically make it easier. HMRC suggests that we will be able to keep track of our accounts all year using software or apps, but there is almost always a learning curve with these things and it could very easily lead to mistakes and fines.
“As always, the Umbrella accountancy team will be keeping track of all the latest changes as they happen. Umbrella customers can be sure that if they have any small query with the new system, then they will be able to get a quick and jargon free answer from their accountant.”