Corporation Tax (Hansard, 20 May 2002)

§ Mr. Djanogly
To ask the Chancellor of the Exchequer what plans he has to extend the reduction in corporation tax, extended to incorporated companies in the last Budget, to unincorporated businesses. [57232]

§ Dawn Primarolo
We have no plans to extend the reduction in corporation tax to unincorporated businesses. In appropriate cases the Government have introduced specific incentives which apply to all businesses. But the profits of unincorporated businesses are liable to income tax, as part of the income of their proprietor, rather than to corporation tax, and in general unincorporated businesses and companies are not directly comparable. Companies are distinct legal entities, separate from their owners, and are subject to the obligations laid down in the Companies Act. It is right that there is a system of taxation specific to them.

§ Mr. Djanogly
To ask the Chancellor of the Exchequer following implementation of the Budget, what corporation tax will be payable by(a) an incorporated and (b) an unincorporated company with turnover of £99,000 and with taxable profits of £40,000. [57233]

§ Dawn Primarolo
The corporation tax payable by a company with profits of £40,000 for an accounting period ending 31 March 2003 would be £7,125 (assuming it is entitled to marginal relief from the small companies' rate but no further reliefs such as double taxation relief). Unincorporated businesses are not taxed separately from their proprietors and it is not possible to give a figure for the income tax payable as that will depend on the allowances and reliefs to which the proprietor is entitled and the extent of any other income.

§ Mr. Cousins
To ask the Chancellor of the Exchequer how many(a) individuals and (b) enterprises have negotiated forward payment contracts with the Inland Revenue for income and corporation tax in each year since 1996. [53476]

§ Dawn Primarolo
Since 1988 the Inland Revenue have entered into arrangements of this sort in a small number of cases. Typically, these arrangements were made on the basis that they were sensible practical solutions that gave 107W a broadly accurate measure of the tax due where there would otherwise be particular difficulties in establishing an exact figure.
In the years since 1996, seven such agreements were made in cases concerning individuals, one in each of the years 1996 and 1999, three in 1997 and two in 2000. In three of these cases the agreements were renewal agreements where the original was entered into prior to 1996. All such agreements have concerned individuals, though some have included corporate aspects as a secondary matter.
These numbers differ from those in my answer of 1 May 2002, Official Report, column 880W because that question and the response to it concerned forward contracts involving fixed regular payments only.