Making Tax Digital

Baroness Neville-Rolfe Excerpts

Wednesday 17th September 2025 Lords Chamber

[Lord Livermore (Lab)]

My noble friend makes an important point; the tax gap is a significant issue. Small businesses account for some 60% of that tax gap, much of which comes from unintended errors. One of the big advantages of Making Tax Digital is having more frequent reporting, and therefore there are far fewer errors. There is also the pre-population of end-of-year tax returns, which again reduces errors. If we can reduce some of those errors, we can reduce quite a significant part of the tax gap.

[Baroness Neville-Rolfe (Con)]

My Lords, in the Government’s plan for SMEs, Backing Your Business, they claim that they are prioritising growth and productivity potential—good news. However, in a Written Answer last week to the noble Baroness, Lady Maclean of Redditch, the Government revealed that they have no idea of the level of cumulative administrative costs of regulation for small business. Does the Minister agree that before his Government impose yet more onerous regulations on small businesses, such as through the Employment Rights Bill, they should find out the existing costs of their regulatory onslaughts and do something about them?

[Lord Livermore (Lab)]

It may surprise the noble Baroness to hear that I absolutely agree. As part of our regulation action plan, we committed to reducing the regulatory burden on businesses by 25%. We must have a benchmark from which we reduce that burden. We are engaged in doing that, and, as I said, I completely agree with the noble Baroness.