Clause 55 - Duty of company to give notice of coming within charge to corporation tax
Finance Bill (except clauses 4, 5, 20, 28, 57 to 77, 86, 111 and 282 to 289, and schedules 1, 3, 11, 12, 21 and 37 to 39)
3:30 pm
Mr John Healey (Economic Secretary, HM Treasury; Wentworth, Labour)
I shall ask the hon. Gentleman to consider withdrawing the amendment, which relates to a narrow point, and ask the Committee to reject it if he chooses not to do so.
The amendment would frustrate the object of the new requirement in the clause for early notification and the provision of information to the Inland Revenue, so that the Revenue can ensure compliance with a wide range of company obligations and offer timely help and support.
The hon. Member for Arundel and South Downs and the right hon. Member for Fylde (Mr. Jack) made a couple of broader points and asked a couple of broader questions. I should say that the clause is intended to ensure that companies that come within the charge to corporation tax comply with their obligations from the outset. A company will usually come within the charge to corporation tax when it starts a business.
Details of newly active companies are important for tax compliance purposes at the point at which they come within the charge to corporation tax. Equally importantly, the new requirement will enable the Revenue to make earlier contact with companies to offer help and support. I trust that all members of the Committee accept that helping businesses to get it right is much better than having to put things right later if they go wrong.
The clause therefore places a statutory obligation on companies to notify the Revenue within three months of their first coming within the charge to corporation tax, and within three months of coming back into the charge to corporation tax following a period of dormancy. I will answer the question asked by the hon. Member for Arundel and South Downs on dormancy in a moment.
The obligation requires a company to provide details of the company, its activities and directors. Precise details of the prescribed information are contained in the draft regulations that I circulated to the Committee earlier this week, which were also published yesterday on the Inland Revenue's website.