The House of Commons voted on a private member's bill this week that, if cleared through Parliament, will force HMRC to refund businesses it has overcharged within 30 days.
Conservative MP
Mike Freer brought forward the bill in response to the inequality of HMRC’s tax refund policy. Currently, businesses must pay taxes owed to HMRC within 30 days or face a fine but when the situation is reversed, HMRC has no deadline or faces any penalties.
Speaking from Westminster, Mike Freer said, “Small businesses’ takings can vary hugely month-to-month and individual’s circumstances can change, meaning they find at the end of the financial year that they have overpaid their tax. HMRC are far too slow to repay and do not seem to appreciate the huge cash-flow pressures that many people are under.”
Freer also argued the late payment rate is six time the unpaid refunds rate. He added: “Currently, with record lows in interest rates, the late payment rate is 3%, but the unpaid refunds rate is just 0.5%. When we look at penalties, the inequality is starker.”
The second reading of the bill is scheduled for 30 March 2012.