Alex Hardaker – CT & VAT (Chair)
Michael Christy - CT & VAT (Secretary)
Richard Harries – Large Business Service (LBS)
Steve Coad – CT & VAT
Will Parker - CT & VAT
Veronica Mcleod – CT & VAT
Jo Wakeman – Carter Programme
Louise Boyle – Business Customer Unit
Duncan Calloway – Business Customer Unit
Ruth Paynter – CT & VAT
Sebastian Hordern - CBI
Richard Baron (IOD)
Graham Wheeler - IOD
Colin Davis – CIOT
Ian Young (ICAEW)
Carolyn Fisher (ICI)
Lakshmi Narain – CIOT
1. Welcome by Alex Hardaker. Donald Drysdale (ICAS) took part via telephone conference. Apologies were received from Mukesh Gunamal – ACCA, Derek Allen – ICAS and Jackie Latham (ICAEW).
2. HMRC said that under proposal 9 of the Review of Links with Large Business HMRC is committed to setting out a consistent approach to informal and formal consultation in the form of a “consultation framework”. HMRC have already announced their commitment to achieve a published framework in early 2007.
3. HMRC said that they aim to issue a draft consultation framework in February 2007 and encouraged representatives to provide comments on the draft.
4. HMRC gave a short presentation on modernising online tax services. HMRC said that consultation and discussion with the tax profession is absolutely core to their work to implement Lord Carter’s recommendations.
5. HMRC also said that they are keen to hear views from the representatives on HMRC current work to establish appropriate legislative structures to ensure compliance with the online filing obligations being introduced as part of these recommendations.
6. HMRC provided representatives with some key dates for Carter Programme
and highlighted that businesses have to file and pay electronically for
CT and VAT in phases from 2008.There was a brief discussion regarding the
eXtensible Business Reporting Language (XBRL). HMRC agreed to issue a summary
paper about XBRL and a short note on Carter, summarising the CT ‘events’
through 2007.
7. HMRC reminded members that this year’s Finance Bill will implement Lord Carter’s recommendation to link the deadline for HMRC to enquire into most companies’ tax returns to the date the return is delivered. Discussion followed about the need to maintain the existing group-based approach to returns from members of larger groups. There was general agreement that retaining the status quo (enquiry window based on the statutory filing date rather than the date of delivery) was preferable for members of large groups. However, HMRC agreed to issue a briefing note to the representatives, so that they could seek views of their members and provide their more considered feedback.
8. HMRC said that they are currently thinking about bringing the CTSA
enquiry closure process into line with the current ITSA closure process.
The closure notice would then amend the return and be appealable, removing
the two 30 day windows for the company and then HMRC to amend the return.
HMRC said that any such change would be within the scope of the Administration
of Taxes Bill, which would be subject to formal consultation. Members agreed
that this would be a sensible rationalisation. HMRC agreed to keep CTOCC
informed as thinking develops.
CIOT Issues
9. Representatives raised some concern regarding the recent letters issued
by Wick Office. HMRC agreed to have a separate meeting with the representatives
to discuss this issue.
Substantial Shareholdings Exemption (SSE)
10. There was a brief discussion regarding the SSE. Representatives said that it would be very helpful if HMRC could consider extending the COP10 time limit in respect of trading status for the purposes of the SSE.
11. HMRC thanked those representatives who have already provided some comments on this issue.
12. HMRC also discussed some radical options to reduce corporation tax admin burdens. Representatives confirmed HMRC view that there was little or no benefit to customers from either reducing the number of boxes on the return form or requiring a return every few years (rather than annually).
13. Representatives thought that, for smaller companies, the payment of corporation tax based on the statutory accounts could be beneficial, and merited further work to flush out issues such as threshold limits and avoidance possibilities.
14. There was a brief discussion regarding non-statutory demerger and the associated costs for SMEs. Representatives agreed to provide some examples to HMRC.
15. It was provisionally agreed to hold the next meeting in April.
