View Idea
Title:
Obtain CT41G formation information direct from Companies House
Reference ID:
12KL
Department Responsible:
HM Revenue & Customs
Problem Description:
Form CT41G is automatically sent to all new companies after they are incorporated, requesting information to set up a Corporation Tax record. (copy here: http://www.hmrc.gov.uk/CTSA/ct41g-08-05.pdf)
Much of the information requested has already been filed at Companies House, specifically:
1) Names and addresses of each director
2) Company's Memorandum & Articles of Association
As HMRC is obtaining the name and registered office of each newly incorporated company, why don't they also obtain this, publically available, information at the same time?
Proposed solution:
As HMRC is obtaining the name and registered office of each newly incorporated company, why don't they also obtain this, publically available, information at the same time?
Cost or time incurred:
Possibly half an hour's time per incorporation at £50 per hour = £25 per incorporation x 450,000 incorporations per year = £11m per year.
Department:
HM Revenue & Customs
Sector(s):
Private Sector
Category(s):
Multiple
Official response
You are right to ask whether HMRC can make better use of public information available from Companies House. HMRC depends quite a lot on this flow of information for administering corporation tax, and the processes involved are still largely manual and paper-based. That needs to change, and the two departments are working on this together. HMRC is also working internally to make better use of the information we already get electronically from Companies House. But all this needs investment, and we have a huge change programme on the go at present, so this work has to take its place in the queue.
The CT41G is normally the first communication a new company gets from HMRC, so it matters to us. We want to make it as useful to us, and also as helpful to companies, as it possibly can be. We know next to nothing about a new company when the form is sent out, normally within a week or so of registration. So it has to work for everything from a small concept business which may or may not ever trade through to a new subsidiary of a household name multi-national. That means the form is always going to be a bit of a compromise.
We do need to get some basic information to new companies - things like their tax reference number, the address of the tax office which will deal with the company and basic information about the company's legal obligations. So we think we will always need to send a pack of material to new companies.
We will also always want to make sure our information about the company is as complete and accurate as possible - for example, to make sure we don't set up a PAYE scheme, or ask a company to send us a tax return, and perhaps impose penalties if it fails to do so, if in fact the company never starts any real activity. We can't look to Companies House for that information, as it is specific to tax. We do need the company to tell us. And the law requires new companies to send us some specific bits of information when it starts any business activity, so it is right that we send it a form to use to do that.
So while you are right that we could get one or two bits of the information the CT41G currently asks for from Companies House, there is a lot more that we do need direct from the company. We don't agree that we can avoid asking companies to fill out and return the CT41G, but we do accept that improvements can be made and that we may be able to prune one or two of the bits of information it asks for in time.
We made some minor improvements to the CT41G in early 2008, mainly to make it easier for companies that are not yet active to tell us that. But we know we are still a long way from getting it completely right. We are doing more design work on it now, and wherever possible we will remove calls for information we can get elsewhere.