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. “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 said. The second reading of the bill is scheduled for 30 March 2012.