§ Mr. MitchellTo ask the Chancellor of the Exchequer what has been the impact on the public finances of(a) the introduction of self-assessment and the six month advance in payments by the self-employed and (b) the moving forward of corporation tax. [39561]
§ Dawn PrimaroloSelf-assessment has not led to an advance in payment dates for the self-employed. The payment dates for the tax due for any year were previously the 1 January of that year and the 1 July immediately following. The position is much the same under self-assessment, with payments on account due on the 31 January and 31 July. The balance of the tax due for the year is then payable on the following 31 January. The overall effect on tax yield of self-assessment compared to the old system is very much a matter of speculation because of changes in taxpayer behaviour. However, it seems likely that the main behavioural effect of self-assessment has been to encourage taxpayers to bring their tax affairs up to date, and has led to some previously undeclared income being declared to the Inland Revenue.
The changes to payment arrangements for corporation tax will first take effect in 1999. The estimated revenue effects of the abolition of ACT and the introduction of quarterly payments of corporation tax are set out in Table C.1. and paragraph C.87 of The Financial Statement and Budget Report March 1998.