§ Mrs. Helen JacksonTo ask the Chancellor of the Exchequer what assessment he has made of the cost to small firms of self-assessment for the purpose of taxation. [23932]
§ Mr. JackSelf-assessment is a major modernisation of the system of tax administration that will provide a permanent reduction for taxpayers in the costs of complying with their obligations. The changes will particularly benefit self-employed people. A compliance cost assessment detailing the estimates leading to this conclusion was published on 28 November 1994. A copy is available in the House Library.
It contains the following summary figures: self-assessment generates a recurrent compliance net saving for businesses, mainly the self-employed, of some £125 to £250 million a year; this figure takes account of recurrent costs to employers who provide benefits to employees estimated at £20 million to £30 million a year; initial costs of adapting to the new system are estimated at £100 million to £200 million; and the typical small self-employed business which does not provide benefits in kind to employees could expect recurrent savings of £30 to £60 a year, more than offsetting the non-recurrent cost in a single year.