What will Inland Revenue and Customs merger mean?

Gordon Brown revealed more detail in his pre-Budget report about merging Customs & Excise and the Inland Revenue. What are the implications for growing businesses?

A. Jim Rogers of Grant Thornton writes:

The change, from April this year, has implications for businesses of all sizes. For businesses who often undertake their own complicated tax compliance rather than using external practitioners, the implications will be far-reaching, and hopefully, a step in the right direction.

The new organisation, HM Revenue and Customs (HMRC) aims to ‘structure the department around customers and functions rather than taxes’ and plans to establish ‘a more specialised service to small businesses’. It will also strive to provide businesses with one point of contact for consolidated tax returns as diverse as PAYE, National Insurance contributions, VAT, customs duties, corporation tax and Working Family Tax Credits. By streamlining the process, the aim is to:

… reduce the number of official bodies businesses have to interact with

… reduce the number of forms businesses have to complete

… co-ordinate inspections

… improve tax collection and the operation of benefits and credits

As many businesses will know, there is often little communication between government departments. If a business is subject to a VAT enquiry, it is usually warned that it will also face an enquiry from the Revenue as a matter of course. Often, however, this fails to materialise. This is an issue the merger aims to rectify, thus reducing tax avoidance.

So it is now more important than ever that businesses ensure that they have their house in order, and if not, to seek help from the relevant authorities.


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