DO THINK THIS IS A BAD IDEA? SIGN THE PETITION HERE.
Making Tax Digital is based on a flawed idea. It was designed to save the government money by increasing the amount of tax paid and making HMRC more efficient but they have got their sums badly wrong. The government’s idea for Making Tax Digital was:
- All businesses and self employed people would use new free bookkeeping software
- All businesses will stop doing their annual tax returns and will update the HMRC 4 times a year
- All businesses and self employed people would stop making mistakes on their tax returns and pay the government more money
- Doing this would make HMRC more efficient and cheaper to run
The government claimed that Making Tax Digital would cost each small business just £280 over four years to implement and would reduce red tape and administration costs by £400 million by 2019-20
Making Tax Digital - The Reality
- There is no free software. All businesses and self-employed people are going to have to buy or rent specialist software. On average this will cost £300 to £500 per business per year.
- Instead of doing 1 tax return a year all businesses and self-employed people will have to do 4 ‘tax updates’ and an annual ‘tax reconciliation’.
- The government suggests you do your tax returns without the help of an accountant. If you do want an accountant to help with your 4 tax returns and your tax reconciliation expect the cost to be between pay £1,250 and £2,770 extra per year in accountancy fees, software and other costs.
All 4 million self employed people businesses are going to have extra expenses due to Making Tax Digital. The government didn’t count this when they did their calculations. Instead of saving business £400 million per year Making Tax Digital is going to cost small businesses £4 billion per year.
Help us Stop Making Tax Digital
If, like us, you think that Making Tax Digital is a terrible idea you can help us to stop it.
- Share our Stop Making Tax Digital video
- Follow us on Twitter
- Use the #saynotoMTD hashtag and share this page
- Get our #saynotoMTD stickers and put them on your car or van
- Write to your MP. Use our sample letter to email your MP and ask them to Stop Making Tax Digital
- Let us know if your MP writes back to you? Are they for or against Making Tax Digital? Let us know
Use our sample letter to tell your MP to Stop Making Tax Digital
[Your MP Name here]
RE: Making Tax Digital For Business 2018.
I am writing to ask you to oppose the proposed HMRC reforms to introduce 4 compulsory tax returns (or updates) per year for small businesses.
From studying the policy document and the evidence given by industry experts before the Treasury Select committee it is clear the reforms are a very bad idea for small businesses and have no chance of achieving their stated objectives.
The initial policy proposal was flawed and based upon assumptions that were either wrong, misconceived or have subsequently be shown to be unachievable, specifically:
-The scheme would work because of widely avaliable free software.
-The cost of implementation would be £280 per small business spread across the first 4 years following implementation;
-After the first 4 years small businesses would benefit financially from proposals;
-The government would see a Net benefit of £935M by 2020/21 by implementing the proposals
The evidence before the Treasury Select Committee can be summarised as follows:
There is no free software of the type envisaged when HMRC put forward the proposals.
The cost to each small business is put at anywhere between £1,250 per annum (The Institute of Chartered Accountants) and £2770 per annum (Federation of Small Business).
There will be no financial benefit to small business and these costs far outweigh any likely benefits which would at best be very small.
The effect of these extra costs imposed on 4 million small businesses will be to reduce their profitability and therefore the amount of tax they currently pay by between £1-2Billion.
I invite you to review the reports from the treasury select committee if you have not already had an opportunity to do so and to confirm that you draw the same conclusion as myself.
Further I would appreciate confirmation that will oppose these proposals.
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