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Corporate rewrite
Draft clauses on trading and property income and partnerships have been published by the Tax Law Rewrite Committee. Comments on the draft clauses are welcome.
www.hmrc.gov.uk
Notice to file
The partial regulatory impact assessment, 'Increasing use of online services' by Lord Carter included the proposal that tax software generated 'substitute' tax returns would no longer be allowed from 2007-08. The reason for this was the duplication of effort in the agent keying in information on his computer, followed by an HMRC Officer having to read the information from the form and key in the same information into the HMRC computer. At present, where HMRC have noted that a substitute form was used in the previous year, a form SA316 ('Notice to complete a tax return') is issued instead of the full return form and the RIA reports that these represent approximately 30% of paper self assessment tax returns.
HMRC have advised that for 2004-05, forms SA316 were issued instead of tax returns as follows.
|
|
Individual |
Partnership |
Trust |
Total |
|
Agent |
1,801,561 |
184,956 |
2,323 |
1,988,840 |
|
No agent |
355,065 |
3,283 |
565 |
358,913 |
|
Total |
2,156,626 |
188,239 |
2,888 |
2,347,753 |
HMRC estimate that the average cost of printing and postage of a tax return is approximately £1 a return, compared to an average cost of printing and posting a form 316, notice to file of £0.25. There is consequently and average saving per notice of £0.75, producing an overall efficiency to the department of approximately £1.7 million. If agents were to request a formal return for completion instead of using a computer-generated form, there would obviously be an increased cost to HMRC, but one presumes that the cost to agents of manually completing the forms would be even more, leading to the likelihood that the withdrawal of the form will lead to more online filing.
