Finance Bill - Revenue takes more interest in firms' affairs
Corporate self-assessment will mean new IT problems and the increasing likelihood of an investigation into companies’ tax affairs, Big Six firms warned this week.
Last week’s finance bill was expected to reveal the details of corporate tax self-assessment and Revenue powers of enquiry. But although the bill included clauses to allow the government to introduce all the necessary legislation, accountants were disappointed the details have not been finalised.
There are still no clear guidelines on the abolition of ACT, for example.
Despite the missing detail, Coopers & Lybrand has launched its Corporate Tax Risk Review service, to prepare companies for regulations which will ‘unearth tax skeletons’.
Tony Elgood, Coopers’ partner responsible for active tax management, said: ‘Corporate self-assessment will not be as big a change as personal self-assessment, but it will be hard for companies to get used to having a penalty regime and estimating how much they owe before the end of their financial year. They will have to manage risk up-front, because all large companies will be audited by the Inland Revenue in the next three years.’
The Revenue looks set to be organised into 15 regional ‘large business offices’ focusing on corporate self-assessment. They will blitz a different tax issue every year, as part of the ‘spend to save’ programme.
Bill Doddwell, tax partner at Arthur Andersen, said: ‘We are already helping our clients prepare for Revenue audits.’