2006 BUDGET REPORT SUMMARY

• Personal tax

• Employment issues

• Corporate & Business Tax

• Capital taxes and Trusts

• VAT, Excise & other duties

• Anti-Avoidance Measures

• Miscellaneous

Online filing

Lord Carter’s review of HMRC online filing services has been published. HMRC have confirmed that in line with the report’s recommendations they will only implement the new measures when the IT systems that will allow efficient online filing are in place and are fully tested.

Lord Carter's other key recommendations are to:

• require businesses to file their VAT returns, company tax returns and PAYE in-year forms online in phases from April 2008

• introduce new filing deadlines for income tax self assessment returns of 30 September for paper forms and 30 November for online returns from 2008

• promote online filing by tax agents and better quality data by withdrawing computer generated paper ‘substitute’ self assessment returns from 2007/08

• link the period that HMRC have to query a return to the date it is filed.

HMRC intend to work closely with businesses, taxpayers, agents and software developers on the implementation of the new measures.

Comment: The proposals are a clear indication of HMRC’s intention to encourage online filing. The new requirements are expected to be introduced in phases and will apply first to large and medium sized VAT traders and employers although new VAT traders will also be required to file their VAT returns online from the outset.

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The Budget proposals may be subject to amendment in the Finance Act. You are therefore advised to contact us before taking any action as a result of the contents of this summary.