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Revenue powers
A major review of powers for the new revenue department, HM Revenue and Customs, was announced during the Commons second reading of the Commissioners for Revenue and Customs Bill. It will be launched in January 2005 with the publication of a consultation document which will cover:
* the suitability of the existing powers;
Revenue powers
A major review of powers for the new revenue department, HM Revenue and Customs, was announced during the Commons second reading of the Commissioners for Revenue and Customs Bill. It will be launched in January 2005 with the publication of a consultation document which will cover:
* the suitability of the existing powers;
* new powers and practices that HM Revenue and Customs might need to allow it to deliver more efficient services and improved compliance;
* scope and benefits of consolidating the different interest charges and surcharge régimes for late payment, the different penalties and rights of appeal.
The Commissioners for Revenue and Customs Bill transfers the existing information and enforcement powers of HM Customs and Excise and the Inland Revenue to the new department of HM Revenue and Customs.
It makes no significant changes to those powers and ring fences them so that they may only be used for the purpose for which they were originally intended. This means that HM Revenue and Customs officers will need to continue to use different powers in relation to different taxes and duties. For example, powers currently used by Customs to collect VAT will not be available to collect income tax.
It is the Government's intention that following this initial consultation and the completion of the Bill's passage, officials in the new department should enter into more detailed discussions with representative bodies. In addition to the consultation, to help explain the current powers régime to taxpayers and claimants, HM Customs and Excise and the Inland Revenue have produced an advice note covering the main areas of interaction: income tax, corporation tax, VAT, Excise and Customs duties, PAYE and tax credits, and pointing taxpayers and claimants to information about other areas. It will be available to taxpayers during inspections and visits, and will also be available to all on the HM Revenue and Customs website.
The advice note is currently available in draft on the Revenue's website for comments, see www.inlandrevenue.gov.uk. Comments should be sent, by 9 February 2005, to: Gill Price, Room 1C-04, 1 Parliament Street, London SW1A 2BQ.
(HM Treasury press release 103/04 dated 8 December 2004.)
Small businesses
Details of a new small business unit that will cater for the needs of small businesses have been announced. It will be charged with improving taxpayer experience and compliance as well as reducing costs for both businesses and the Revenue and Customs by eliminating unnecessary contact. It will ensure that the development and delivery of the tax system takes full account of the needs of small business and that necessary contact is handled effectively, efficiently and comprehensively. Theresa Middleton, a senior official with Revenue and Customs experience, has been appointed to lead the unit.
A high-level advisory group with senior private sector representation will guide the work of the small business unit and ensure that the department harnesses the business community's ideas for improved compliance at lower costs. William Sargent, chairman of the Small Business Council and Martin Wyn Griffith, chief executive of the Small Business Service, have agreed to join the group, which will be chaired by Dave Hartnett of the Board of Inland Revenue.
The longer-term goal for Revenue and Customs is to enable its support and compliance staff to provide:
* joined-up systems so that business needs to provide information only once, when possible through a single form;
* integrated audits covering direct and indirect taxes;
* a single account through which all payments and repayments may be made;
* streamlined and effective support and access to information in a way that better suits small business customers, including more effective use of information technologies and the Internet.
In the long term, enabling legislation as well as the development of new information and technology systems will be required and will take a number of years to build. As a first step, the departments will now begin consulting on the scope for a single tax return that would bring together all small business taxes.
Discussion paper
The Government has published a paper, 'Small companies, the self-employed and the tax system', to discuss the strategic issues raised by recent developments affecting small businesses. It sets out:
* the Government's economic objectives;
* the diversity of small businesses in the UK and the commercial development in which they operate;
* the range of legal structures that small businesses adopt.
It then sets out the tax régime for business income and gains, covering some of the issues raised by the interaction of the personal and corporation tax régimes and the tax requirements with which businesses must comply. Overall, the Government hopes that the paper will provide the starting point for discussion with interested parties, focusing particularly on self employment and the remuneration of owner-managers of small incorporated and unincorporated businesses.
Comments are invited, in particular on:
* how the Government can improve targeting of incentives for growth and enterprise;
* whether owner-managers of companies should be segmented from other company owners for tax purposes;
* how the trade-offs between the different tax treatments for different types of business can be managed, bearing in mind the objectives of minimising the economic costs of raising tax revenue and of minimising compliance and administrative costs;
* whether and to what extent businesses would value the benefits of certainty and simplicity over specific incentive structures.
Comments should be sent to SME Taxation Team, Room 2/36, 2nd Floor HM Treasury, 1 Horse Guards Road, London SW1A 2HQ. Copies of the paper are available from the address above, or can be downloaded from www.inlandrevenue.gov.uk or www.hm-treasury.gov.uk.
(Inland Revenue news release dated 2 December 2004.)
R&D manual
The Revenue's Corporate Intangibles Research and Development Manual incorporating substantial new research and development material has been republished.
(www.inlandrevenue.gov.uk)
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