Inland Revenue 11
                                                  17 March 1998
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                 SELF ASSESSMENT FOR COMPANIES

To assist companies prepare to make changes for self
assessment, the  Government announced today that:

-   the legislation on self assessment for companies is to be  
    restructured and  written in clearer, easier to use
    language, to make it more accessible to  companies and
    their advisers; and

-   the administrative arrangements for group relief claims
    are to be simplified. Self assessment for companies will
    apply to accounting periods ending on or  after 1 July
    1999.

The legislation will be included in the Finance Bill.

DETAILS

Self assessment

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, and the Chancellor announced the  start date in his
pre-Budget report on 25 November 1997.

2.   The 1 July 1999 start date will be set by a Treasury
order made under  existing legislation.  Self assessment will
apply to companies' accounting  periods ending on or after
then, so companies will not enter self assessment  until 2
July 1998 at the earliest.

Simpler legislation

3.   The legislation has been written taking into account
lessons learned  from the Tax Law Rewrite project, whose aim
is to rewrite UK direct tax  legislation so that it is clearer
and easier to use.  This has involved: 

-   restructuring the present legislation covering self
    assessment for companies  and putting it into plainer,
    simpler language; and

-   writing the further legislation needed to update some
    existing tax rules for  companies to take account of self
    assessment in the same new style. 

4.   The Self Assessment Consultative Committee, consisting of 
representatives of business and other interested parties, has
had the  opportunity to comment on the legislation in draft.

Group relief

5.   Groups of companies dealt with mainly in one tax office
can already  enter into special arrangements intended to
streamline the handling of their  group relief claims that are
contained in Statement of Practice 10/1993.   These
arrangements will be simplified when self assessment for
companies is  introduced, to:

-   enable the principal company within the group to submit a
    single "joint  amended return" containing all the
    information needed to monitor the group's  allocation of
    group relief between companies;

-   release companies covered by a special arrangement from
    the need to  provide copy notices of consent to the
    surrender of losses as group relief;  and so

-   reduce substantially the amount of paper flowing between
    groups and the  Inland Revenue.

NOTES FOR EDITORS

Self assessment

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.   The start date for self assessment was announced in a
pre-Budget  report press release of 25 November 1997 entitled
"Self assessment for  companies" (Inland Revenue 2).

3.   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.

4.   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.

The Tax Law Rewrite project

5.   The Tax Law Rewrite project aims to rewrite all or most
of the UK's  existing primary tax legislation in order to make
it clearer and easier to use.   The key points of the project
are:

-   a clearer, more logical structure for tax legislation;

-   shorter provisions and shorter sentences;

-   use of plain language and other reader aids; and

-   no changes in main tax policies (but will not prevent tax
    simplification). 


Group relief

6.   The group relief rules enable companies to obtain relief
for trading and  some other losses by surrendering those
losses to other companies in their  groups.  The rules also
cover consortiums.



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