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HM Treasury

Pre-Budget Report

In Rev 2

25 November 1997

IR 2: Self assessment for companies

Self assessment for companies will be introduced for accounting periods ending on or after 1 July 1999.

The Chancellor Gordon Brown announced the start date for this long-expected change in his pre-Budget report today. Companies and their advisers now have certainty, as well as a little more time to prepare for the change.

The further legislation needed to cater for self assessment for companies will be included in the next Finance Bill.

Details

  1. Personal taxpayers (that is, individuals, partnerships and trustees) are already covered by self assessment. It was always intended that self assessment for companies would follow. It was announced last year that the start date for this would not be before early 1999.
  2. The start date will be set by a Treasury order made under existing legislation. It is to be 1 July 1999, so self assessment will apply to companies’ accounting periods ending on or after then. This means that companies will not enter self assessment until 2 July 1998 at the earliest.
  3. The further legislation will update some existing tax rules for companies, such as those applying to group relief claims, to take account of self assessment. The Self Assessment Consultative Committee will have the opportunity to comment on them.

Notes for editors

  1. Companies already have to work out their own tax bills under the existing Corporation Tax Pay and File system which came into effect from 1 October 1993. So the move to full self assessment for them will be a relatively small further step.
  2. Self assessment for companies does not change the basic rules for paying tax and filing tax returns. But a company’s tax return will in future contain a self assessment of its tax liability for the accounting period that it covers. Unless the Inland Revenue makes enquiries into the tax return, the company’s tax position will normally be regarded as finalised 12 months after the filing date for the tax return.
  3. An accounting period for a company cannot be more than 12 months long. So accounting periods ending on or after 1 July 1999 cannot start before 2 July 1998.
  4. The Self Assessment Consultative Committee consists of representatives of business and other interested parties.

Media enquiries to: 0207 438 6692/6706/7327 (Out of hours: 0860 359544)

Inland Revenue press releases are available from the Inland Revenue web site.

External links


Pre Budget 1997 Press Notices index page

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