Corporate Tax Operational Consultative Committee
Minutes of meeting held on 15 September 2004 at 22 Kingsway, London WC2
Present:
Tax Personnel |
Representative Bodies |
|---|---|
| Alex Hardaker - Revenue Policy (Chair) | Sebastian Hordern - CBI |
| Kathy Prior – Revenue Policy (Secretary) | Chas Roy-Chowdhury - ACCA |
| Steve Mole – Service Delivery Support | Mukesh Gunamal - ACCA |
| Ruth Paynter – Business Services | Colin Davis – CIOT |
| Richard Harries - Large Business Office | Graham Wheeler - IOD |
| Richard James - Treasury | Lakshmi Narain - CIOT |
| Gina Tierney - HMCE | Jackie Latham - ICAEW |
| Matthew Palmer - HMCE |
Introduction and apologies
1. Apologies were received from Carolyn Fisher - CBI, Donald Drysdale - ICAS, Nigel Eastaway - CIOT, Graham Wheeler - IOD, Sally Littlejohns - Large Business Office
HMRC Bill - informal consultation
2. The Bill team provided attendees with an overview of current plans for the transition to HM Revenue and Customs, and outlined proposals for legislating to create the new department.
3. Representatives' comments included:
- The needs to maintain service levels throughout the transition as efficiency savings were realised.
- The need to develop integrated working over a period of time, and to ensure that officers and the public were aware of, for example, the powers available for each of their functions and the circumstances in which those powers could be used.
- The need to ensure that integration delivers real
benefits for customers, and those specific measures
to facilitate integration are subject to consultation
where appropriate.
Matters arising from minutes of previous meeting (17 May 2004)
Other Fora
4. The Large Corporates Forum met on 20 July when the topics discussed included disclosure of tax avoidance schemes and the role of the Special Investigations Section. They also met again on 14 September when they discussed the formation of HMRC.
Application Note G to FRS 5
5. The minutes of the May meeting were revised to make it clear the views stated were that of representatives and not those of the Revenue. Application Note G has now been referred to the Urgent Issues Task Force for them to decide on the correct interpretation.
Euro Programme
6. No comments had been received following the presentation at the last CTOCC meeting. Representatives felt that if the Euro were introduced on the first of January in any year then there would be no problems. However, if the Euro was introduced later in the year it could be difficult. The Revenue explained they were required to do some procedural planning and would appreciate representatives giving some thought to practical issues they can envisage, such as rounding.
UK Transfer Pricing
7. Draft Revenue guidance is now being finalised after consultation and should be published in December.
SME Definitions
8. The Revenue planned to produce draft regulations on a general SME definition and one for R & D purposes. These are not yet ready – but would be published as soon as they were.
5.95 Discussion paper on small business taxation
9. The Treasury would be responsible for the shape and content of a discussion paper to be issued at PBR. The Revenue will provide support on the background to the issues and technical advice on any tax issues. CIOT and the ICAEW have already made representations about the potential scope of the discussion paper to the Treasury.
CTSA in practice
Compulsory notification of new companies
10. The draft regulations were revised in relation to comments and are available on the IR internet site. Representatives felt the onus should be on the Revenue to issue forms for completion to fulfil the new obligation. The Revenue explained that forms CT41G were issued to all new companies and would continue to be issued, but now with an accompanying sheet of help, notes and reminders of statutory requirements plus a blank form 64-8 authority in case it was needed. The Revenue explained that the new regulations should not present any problems to compliant companies.
Implications of Veltema ruling
11. Representatives felt that they no longer have certainty and finality over returns. This issue has already been raised at the Operating Consultative Committee (OCC) and they have set up a working party to consider the implications. CIOT have a representative on the working party.
R&D
12. Representatives expressed concern that if the cost of formulating the claim and then dealing with a subsequent Revenue enquiry exceeded the value of the R & D tax credit, it would undermine the initiative. The Revenue said there was a commitment in Budget 2004 to improve the delivery of the R & D credits and that would include better education for companies (especially the smallest) and their advisers and for Inspectors. In addition, there was a lot of support from technical specialists in Head Office to local offices intended to resolve issues of particular difficulty or complexity and to ensure consistency. However, the process of dealing with and resolving any enquiry was the responsibility of the local office and any disagreement should be dealt with under the normal appeals processes.
CT600
13. Work is continuing on the CT600 suite of forms and associated Guide. The latest draft versions of the forms are available to Practitioners on the Inland Revenue Internet at: /ct-drafts/forms-details.htm. The draft Guide will also be posted there soon. It was hoped that paper versions of the forms and Guide would be available by the end of October and shortly before then the PDF version will be accessible from the IR Internet. From the end of October CT Online will have Version 2 of the CT600 available, and will also be able to accept software house versions of the CT600 and all supplementary pages.
CT Online
14. The number of companies and agents registering and using the services (Online filing and View Liabilities and Payments) continues to grow. The Revenue now anticipates being able to accept company accounts and computations in XBRL from summer 2005.
Forms
15. From the middle of next year the Revenue plan to issue copies of return reminders (forms CT205) to agents authorised by form 64-8, at the same time as companies receive their reminder. At around the same time it is intended to complete a review of which forms are copied to 64-8 registered agents and to provide agents with a list of client companies, identifying those for whom the Revenue hold form 64-8 authorities. The Revenue also intends to begin a review of the way in which interest details are presented on various statements and notices.
Associated Companies rule
16. The Revenue has received Budget Representations about difficulties in applying the legislation in respect of 'associated companies'. The Revenue said that the legislation was broadly drafted in order to prevent avoidance but appreciated that there were some rough edges. They suggested a separate meeting in order to discuss the issues and IR perspective. A similar session was run with the Small Business Service recently and that had been well received.
AOB
17. The future of CT OCC would need to be considered
in light of the new structure of the Revenue following
the transfer of some work to the Treasury. It might
be appropriate to merge with ITOCC. The Revenue is looking
at the issues and would welcome views on whether a merger
was practical.
Next meeting
18. The next meeting will be on 26 January from 2- 4pm, at 1 Parliament Street.
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