Revoke the Corporation Tax (Instalment Payments) Regulations 1998 — rejected — 1 Mar 1999

The majority No voters rejected a proposal^[1] to revoke the Corporation Tax (Instalment Payments) Regulations 1998.

The regulations require large companies to pay their corporation tax in instalments. This was a change to the previous system where large companies paid their corporation tax nine months after the end of their accounting period.

Nick Gibb MP argues for revoking the regulations as follows^[2]:

• '[This] is an enormous change and brings forward the tax bills of 20,000 of the largest companies in this country. Together, those companies employ more than half of all employees and represent half of the total turnover in 821 businesses in the United Kingdom. That is why the measure will raise £8.9 billion of extra taxes over the four-year transition period, money which has to be found and paid over by the corporate sector. That money could have been used for investment and job creation.'

However, Dawn Primarolo MP explains why the government is against revoking the regulations^[3]:

• 'companies which will not have to pay by instalments—the overwhelming majority of companies—will gain £1 billion in cash flow as a result of the abolition of advance corporation tax alone. After the transitional period is through, in the year 2003–04, companies will gain £1.6 billion a year from the combined effect of the changes... We have a simplified corporation tax system, which supports and encourages companies. We have an instalment method that will benefit companies, not cause problems for them.'

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• [1] Nick Gibb MP, House of Commons, 01 March 1999
• [2] Nick Gibb MP, House of Commons, 01 March 1999
• [3] Dawn Primarolo MP, House of Commons, 01 March 1999

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