TaxPersonal TaxOne thousand companies to escape corporate self-assessment

One thousand companies to escape corporate self-assessment

Action was taken yesterday to implement two Budget measures which will slightly lift the burden on companies imposed by the corporate self-assessment system.

The Inland Revenue said that regulations have been laid before the House of Commons which will:

reduce by 1% the rate of interest on underpayments of corporation tax under the quarterly instalment arrangements for large companies;

double the de minimis limit, below which large companies do not have to pay by instalments, from £5,000 to £10,000. As a result around 1,000 companies will be removed from the instalment arrangements.

The reduced rate will apply from 20 April 2000 and the reduction will affect interest which is already running as well as interest on tax due after that date.

The Inland Revenue will continue to monitor the instalment payment arrangements closely, a spokesman added. Further changes in the interest rate may be made if market conditions or changes in payment patterns indicate they are necessary.

The new de minimis limit will apply for accounting periods ending on or after 1 July 2000.

Double tax wars

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