§ Mr. Tim Smithasked the Chancellor of the Exchequer if he will make a statement on what progress has been made in the studies into the possibility of improving the administrative arrangements for assessing and collecting corporation lax.
§ Mr. MooreDuring 1983, the Inland Revenue field-tested an experimental corporation tax return form, which involved companies and their advisers computing their taxable profits and calculating the tax due. One hundred and fifty volunteer firms of accountants took part and nearly 600 company returns were completed. We are grateful to all those who took part for the time and effort which they gave. The results, which have now been analysed, provide the necessary basis for moving forward to the next phase of the project.
This will involve the general introduction by the Inland Revenue of a new type of corporation tax form, which will offer all companies the opportunity of standardising their computation of taxable profits and of providing a calculation of the tax due. This new form, to be introduced next year, will be a tax working sheet, to be used at the discretion of a company and its tax advisers. There will be
192WPrime Minister on 7 June 1984 at column 221. Part of the additional cost will be found from efficiency savings within the service. The balance will be met from the Reserve. The increase will not therefore add to the planning total of public expenditure. The changes, which, for the voted cash limits are subject to parliamentary approval of the necessary Supplementary Estimates, are as follows:
no statutory requirement to complete it. It will be designed and introduced in consultation with the main representative bodies concerned, which have welcomed the idea in principle. It could in due course form the basis of a much more efficient assessing and collection system.
At the same time, the Government will examine the changes which may be needed in the present corporation tax compliance code. Consultation on this will be included in those which, it has already been announced—18 May 1984, columns 270–71—are to take place in connection with the implementation of the Keith committee's recommendations on enforcement powers.
These developments are part of the Government's continuing review of possible ways of improving the way the tax system is organised and administered. No decisions on changes will be taken, however, until the further consultations have been completed.