Tax reporting for small business and the self-employed

The House is to debate E-petition 115895 in Westminster Hall on 25 January 2016 at 4.30pm. The petition calls on the Government to “scrap plans forcing self-employed & small business to do 4 tax returns yearly.”  The petition has over 108,000 signatures to date.

The debate will be led by Oliver Dowden, a member of the Petitions Committee.

In the March 2015 Budget the Government announced plans for digital tax accounts, which would remove the need for individuals and small businesses to file an annual tax return. In December HM Revenue & Customs published Making Tax Digital, which sets out its strategy to implement this new system by 2020. The Government intends that most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account. Individuals in employment and pensioners will be exempt from this system of quarterly updates, unless they have secondary incomes of more than £10,000 per year from self-employment or property. A formal consultation is to be launched in spring 2016.

In its response to the petition, the Government has stated, “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’.”

Public engagement for the debate

The Petitions Committee has said it would “do all it can to maximise the potential for petitioners and other members of the public to be involved with debates on petitions.” With this in mind the Committee asked petitioners to share their views via Twitter on the following;

• What do you think of the Government’s response to this petition?
• What points would you like MPs to raise in the debate?
• What questions would you like the Government to answer?

They were asked to submit their views using #HoCpetitions before 10am on Thursday 21 January. The Committee also informed petitioners that a summary of the tweets will be provided for MPs ahead of the debate.

The Committee received 1285 tweets from 565 contributors in 24 hours. A summary is provided in this debate back. Individuals may search #HoCpetitions on Twitter to view all the comments and respond to points made.

The Petitions Committee working methods say it would “…do all it can to maximise the potential for petitioners and other members of the public to be involved with debates on petitions, including:

• giving plenty of notice in advance of debates, wherever possible
• creating opportunities for petitioners and others to engage with MPs before debates take place, so that their views inform debate
• offering opportunities after debates for public discussion.