Alex Hardaker - CT & VAT (Chair)
Amelia Galloway – CT & VAT (Secretary)
Will Parker - CT & VAT
Steve Mole - ECOps
Richard Harries - Large Business Service
Steve Coad – CT & VAT
Dan Hurtley (NAO)
Nancy Park (NAO)
Sebastian Hordern (CBI )
Carolyn Fisher (CBI)
Chas Roy-Chowdhury (ACCA)
Lakshmi Narain (CIOT)
Colin Davis (CIOT)
Nigel Eastaway (CIOT)
Graham Wheeler (IOD)
Donald Drysdale (ICAS)
Ian Young (ICAEW)
1. Welcome by Alex Hardaker. Apologies were received from Sally Littlejohns (LBS)
2. Representatives reported that discussions were ongoing.
3. Representatives expressed concern that the proposed abolition of the Starting Rate of corporation tax would mean that many clubs and other forms of unincorporated associations with very modest profits would be brought back into the tax net. HMRC explained that they had an administrative practice not to pursue very modest amounts of tax where the amount would be outweighed by the cost of assessment and collection. Therefore it was probable that it would apply to most clubs and associations so keeping them out of the tax net. HMRC confirmed that all of their operational offices were aware of the administrative practice.
4. Representatives reported good progress in discussions with the HMRC R & D Team since the last meeting.
5. HMRC reported that a separate meeting had been held with two of the representative bodies to explore the respective points of view. While there had not been a meeting of minds, the meeting had been very helpful in deepening the understanding of the issues.
6. Representatives noted the outcome of the meeting and said while they accepted the need for rules to prevent profit fragmentation, the current definition of associates meant it was extremely difficult for taxpayers to know precisely with whom they were associated. And that in many cases the rules meant that businesses with no economic connection were treated as being associated.
7. HMRC said that HM Treasury were now in the lead and referred representatives to the PBR 2005 documents. These indicated that the focus of the project had shifted to international issues – particularly the implications of the EU Treaty litigation. In the short term, it was understood that Leasing Reform would be included in Finance Bill 2006.
8. NAO introduced and explained the broad aims and purpose of the study. In particular they would be inviting views on:
9. After debating the proposed terms of the NAO study, it was agreed that the questions would benefit from further refinement and focusing. Subject to that a number of representatives indicated that they were prepared to participate.
10. HMRC gave a brief presentation on the purpose of the consultation process and the perceived business benefits from re-aligning corporation tax filing dates.
11. Representatives expressed a number of contrary views, including:
12. HMRC noted representatives’ views and that it was clear that they could not be explored fully within the time allotted for the meeting. It was agreed that HMRC would give thought to:
13. CT 600: the latest versions were now available on the internet and in paper form (via the Order Line). Other changes :
14. HMRC proposed to issue a new form in autumn 2006 to newly incorporated companies around 3 months after being set up. The aim was to improve customer service and it would set out the HMRC view based upon the available data as to the expected filing and payment dates.
15. HMRC said that they also planned to issue a letter in late spring to recently incorporated companies that had not made a CT41G return. The aim again, was to improve the quality of HMRC data so as in turn to improve customer service.
15. None
16. Late May or early June 2006.
