HC Deb 25 April 1985 vol 77 cc981-2
9. Mr. Nicholas Baker

asked the Chancellor of the Exchequer if he has any plans to introduce self-assessment for income tax payers; and if he will make a statement.

Mr. Hayhoe

Self-assessment will be among the matters to be discussed in the Green Paper on the reform of personal taxation, along with other possible long-term developments.

Mr. Baker

Is my hon. Friend aware that where there is a proper audit system, as in the United States of America, the system of self-assessment works very well? Is he also aware that the two main advantages are, first, that delays are reduced and, secondly, that administrative and staff costs for the Revenue can be dramatically reduced? Will he examine such a system most carefully?

Mr. Hayhoe

This question will form part of the Green Paper and I hope that there will be widespread public debate on it. Such a system would have some of the effects to which my hon. Friend has referred. He may have seen what Mr. Roscoe Eggar, the Commissioner of the Internal Revenue Service in the United States, was saying towards the end of last year, when he was arguing that a change to something more like the British system would mean that tax payers would be spared 97 million hours in return preparation and untold amounts in preparation fees. There is a down side, in that extra administrative burdens on individuals would flow from a system of self-assessment. I agree with my hon. Friend that it requires careful consideration to get the overall balance right.

Mr. Barron

Is it not more likely that self-assessment will lead to a growth in the number of accountants in high streets, and is that not a form of privatisation?

Mr. Hayhoe

Self-assessment in the United States has led to a considerable amount of professional advice being sought by the individual taxpayer.

Sir William Clark

Does my hon. Friend agree that as it is essential to have a public debate on the forthcoming Green Paper, it would be a good idea to set up a Select Committee to look into this question and take evidence in public?

Mr. Hayhoe

I am sure that my right hon. Friend the Leader of the House has heard that suggestion. That would be a matter for him rather than for me.

Mr. Meadowcroft

Does the Minister agree that there is an equal case for the Secretary of State for Social Services to introduce self-assessment for those receiving supplementary benefit if self-assessment for PAYE taxpayers is introduced?

Mr. Hayhoe

That will not figure in the proposed Green Paper on personal taxation.