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8 Dec 2005 : Column 1452W—continued
Operating and Financial Review
Lynne Featherstone: To ask the Chancellor of the Exchequer (1) what assessment his Department has made of the effect on company stakeholders of the non-implementation of the Operating and Financial Review; and if he will make a statement; [34839]
(2) what assessment his Department has made of the cost to businesses in preparing for the implementation of the Operating and Financial Review; and if he will make a statement; [34840]
(3) what the reasons were for his decision to abandon the Operating and Financial Review; [34772]
(4) what estimate he has made of the cost to British companies of preparing to meet the requirements of the Operating and Financial Review; and if he will make a statement; [34773]
(5) what assessment he has made of the implications of his announcement of the removal of the obligation to publish operating and financial reviews for the Government's policy on company law reform; and if he will make a statement. [35009]
John Healey: The Government assessed the costs of implementing a statutory Operating and Financial Review against those of implementing an enhanced Business Review in a Regulatory Impact Assessment, which was published alongside the DTI's formal response to consultation. It was estimated that a statutory Operating and Financial Review would cost business £33 million per annum more than the Business Review. Most of these additional costs related to the different audit requirements applying to the OFR compared to the Business Review.
Consistent with its approach to company law reform of simplifying company law, reducing the regulatory burden on business and promoting effective shareholder engagement, the Government have concluded that a requirement for an enhanced Business Review, in line with the requirements of the European Accounts Modernisation Directive, is preferable to a requirement for a statutory Operating and Financial Review for quoted companies. The enhanced Business Review will meet key narrative reporting requirements, while imposing considerably less cost than the Operating and Financial Review. The new reporting regime demonstrates the Government's ongoing commitment to strategic forward looking narrative reporting.
Lynne Featherstone: To ask the Chancellor of the Exchequer (1) what consultation he undertook with stakeholders before revoking the regulations covering the implementation of the Operating and Financial Review for FTSE listed companies; and if he will make a statement; [34841]
(2) what discussions he had with (a) the Confederation of British Industry, (b) the Department for Trade and Industry, (c) the Department for the Environment, Food and Rural Affairs, (d) the Association of British Insurers and (e) the Sustainable Development Commission prior to his decision to abandon the Operating and Financial Review; and if he will make a statement; [34774]
(3) if he will list the organisations consulted on his decision to remove the obligation on businesses to publish operating and financial reviews; [35008]
(4) whether he consulted the (a) Operating and Financial Review Working Group and (b) Financial Reporting Council before his decision to remove the obligation on companies to publish an operating and financial review. [35012]
John Healey [holding answer 5 December 2005]: In line with the Government's commitment to simplifying company law and reducing the regulatory burden on business, the Government have decided to replace the requirement for quoted companies to produce a statutory Operating and Financial Review with a requirement to produce an enhanced Business Review. This aligns the reporting requirements of quoted companies with the requirements of the European Accounts Modernisation Directive and demonstrates the government's ongoing commitment to strategic forward-looking narrative reporting.
In considering the issues around removing the statutory OFR, the Government reviewed responses to the extensive consultation on the introduction of the OFR published by the DTI in December 2004.
8 Dec 2005 : Column 1453W
Private Members' Bills
Mr. Amess: To ask the Chancellor of the Exchequer, if he will list those Private Members' Bills introduced under (a) Standing Order No. 14(6), (b) Standing Order No. 23 and (c) Standing Order No. 57 which were (i) supported and (ii) opposed by his Department in each session since 1997–98. [36059]
John Healey: The information requested is not available.
R64–8 Forms
Mr. Philip Hammond: To ask the Chancellor of the Exchequer how many R64–8 forms have been (a) received and (b) processed successfully each month since May 2004; what target has been set for the speed of processing of form R64–8 in the central processing facility; what assessment he has made of the risk of a backlog of unprocessed R64–8 forms at 31 January 2006; how many centrally employed Inland Revenue staff are involved in processing R64–8 forms; what representations he has received regarding the decision to process R64–8 forms centrally rather than at local HM Revenue and Customs offices; what the average processing time was from receipt to completion for R64–8 forms received (i) prior to and (ii) since the centralising of processing; and if he will take steps to ensure that taxpayers are not penalised where an R64–8 form has been submitted but remains unprocessed at the last date for filing tax returns. [35183]
Dawn Primarolo: Prior to April 2005 this work was dealt with across the IR office network. To improve customer service, by ensuring consistency in treatment, the centralisation of this work began in April 2005. Statistics are only available from when the work was centralised in April 2005.
This work is subject to a turnaround target for correspondence of 15 working days. The current average turnaround time for processing the clerical forms 64–8 on all the relevant systems within NICO is 10 days and eight days for recording the 64–8 on the self assessment system.
Plans are in place to ensure that every effort is made to have no self assessment related forms on hand at 31 January 2006. We have introduced an online authorisation service which allows agents to set up client authorisations without the need to submit paper 64–8s.
At 2 December there were 129 full time equivalent staff working on processing 64–8 forms.
8 Dec 2005 : Column 1454W
We anticipate processing more than 1 million 64–8 forms this financial year, 251 representations have been received about the process. Of those 57 per cent. have mentioned delays in the process. Only a very small proportion has specifically mentioned concerns about the centralisation of the process.
As mentioned above, the current average turnaround time for processing the clerical forms 64–8 on all the relevant systems within NICO is 10 days and eight days for recording on the self assessment system.
The online agent authorisation service is currently available. Existing guidance on HMRC's website or the leaflet COP1 gives taxpayers information on how to appeal against any penalties imposed by HMRC.
Research and Development (Tax Relief)
Kitty Ussher: To ask the Chancellor of the Exchequer what assessment he has made of the impact of research and development tax reliefs and tax credits on companies' propensity to spend money on research and development. [35495]
John Healey: I refer the hon. Member to the reply given to the hon. Member for Twickenham (Dr. Cable) on 7 November 2005, Official Report, column 95W on Rand D tax credits. The results from the survey of Rand D companies referred to in that reply were published on the HM Revenue and Customs website on 2 December 2005 at www.hmrc.gov.uk/research/ The survey shows that the R and D tax credit has already had a positive impact since its introduction; half of those with a successful claim said that R and D tax credits had had some impact on either their R and D spend or R and D projects.
The survey results form the first part of the long-term evaluation of R and D tax credits. The Government remain committed to ongoing evaluation of the R and D tax credit and will continue to appraise its overall impact as further evaluation results build up over time.
Kitty Ussher: To ask the Chancellor of the Exchequer how many (a) small and medium-sized and (b) other companies have chosen (i) to offset research and development tax relief against current or future tax and (ii) to receive research and development tax credit as a cash sum in each year for which figures are available; what the total (A) turnover and (B) number of employees is of those companies in each case; and what the total value is of the tax (1) relief and (2) credit in each case. [35496]
John Healey:
Data for small and medium-sized enterprises (SMEs) is published on the HM Revenue and Customs website at www.hmrc.gov.uk/stats/corporate_tax/randdtcmenu. The data shows the number and value of claims for research and development (R and D) tax reliefs. The value of support claimed is classified as either reductions in corporation tax revenue from setting off R and D tax reliefs against profits, payable credits or a combination of both. The total turnover of companies claiming R and D tax reliefs under the SME scheme is shown in the following table.
8 Dec 2005 : Column 1455W
| £ million | |
|---|---|
| 2000–01 | 2,620 |
| 2001–02 | 6,630 |
| 2002–03 | 10,710 |
| 2003–04 | 14,100 |
| 2004–05 | 7,890 |
| 2005–06 | 220 |
Note:
Figures, particularly for later years, are subject to change as more claims are received.
Data for other companies (commonly called large companies) are shown in the following table. The claims and value of support for large companies relate only to reductions in corporation tax revenue from companies use of R and D tax reliefs to reduce their tax liabilities.
Notes:
1.Figures, particularly for later years, are subject to change as more claims are received.
2.The number of claims and total turnover are calculated according to the financial year in which the company's accounting period ends. The value of support claimed is calculated on a receipts-basis according to when tax receipts are foregone by HM Revenue and Customs.
Information is not available on the total number of employees of companies claiming R and D tax reliefs.
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