A number of MPs are calling on HMRC to stop the planned rollout of its Making Tax Digital reforms to microbusinesses in the UK, arguing that these companies have enough to deal with without paying for expensive software.
The MPs are members of the Public Accounts Committee (PAC), which is a cross-party organisation, and they have made the recommendation in the PAC’s new report. The report deals with the issue of how to close the chasm between tax received by HMRC each year and what is actually owed – which is around £31 billion.
In the report, the PAC makes the case that although Making Tax Digital was intended to resolve this problem, it is questionable whether it is actually doing much to prevent costly mistakes in tax returns. It then goes on to argue that it is unjustifiable to ask very small firms to pay thousands of pounds for software compatible with the new system, when so many are struggling with the fallout from the pandemic.
The report concludes by asking HMRC to review whether it is an affordable and reasonable scheme before extending it to more companies. At the moment, businesses and self-employed people who have a turnover that is above the threshold for paying VAT are required to use the Making Tax Digital system to submit their returns.
One way that firms can be guaranteed to avoid any errors in tax returns is by hiring a business accountant who specialises in tax return services in Goole or any region they are based in.