§ Mr. MacleanTo ask the Chancellor of the Exchequer (1) how many businesses were affected by the 1997 Budget announcement which prohibited the(a) transfer of unused past allowances and (b) acceleration of capital allowances; and if he will estimate the average cost to each affected business; [70685]
- (2) how many businesses were affected by the 1997 Budget announcement that dividends will be taxed as trading profits; and if he will estimate the average cost per business; [70686]
- (3) how many businesses were affected by the 1997 Budget announcement which blocked company purchase schemes; and if he will estimate the average cost to each affected business; [70699]
- (4) what estimate he has made of the number of businesses which will be affected by the change in rules on (a) capital gain buying and (b) controlled foreign companies which were announced in the 1998 Budget; and what will be the average cost per business. [70687]
§ Dawn Primarolo[holding answer 15 February 1999]In respect of all but the 1998 changes obliging companies to include amounts chargeable under the controlled foreign company (CFC) rules in their self assessment tax returns the measures referred to are aimed at stemming the loss of tax through avoidance devices and possibly outright evasion, rather than being tax raising. The relevant tax yields in the respective Budget Reports reflect the direct effects of the measures within the existing level of activity. The measures protect the Exchequer against greater losses in the future. Accurate estimates of the number of businesses affected directly at the time action was taken, or who might in future have been involved if action had not been taken, are not available.
In respect of the CFC change relating to self assessment, it is estimated that 1,500 groups will be affected by the new legislation and that the total compliance cost will be under £10 million in the first year. Recurrent costs will be considerably less than initial costs. The change is estimated to raise £50 million in a full year.