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HM Revenue and Customs set for 18 April launch

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8th Apr 2005
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The Treasury has announced that the new integrated revenue department, HM Revenue and Customs (HMRC), will be launched on 18 April along with the new independent prosecutions office, the Revenue and Customs Prosecutions Office.

The Commissioners for Revenue and Customs Bill received Royal Assent on 7 April. The Act will be available shortly on the HMSO website. It provides the legal basis for the new, integrated revenue department.

The Chancellor of the Exchequer's first "annual remit" to the chairman of HM Revenue and Customs has been published.

The remit outlines the department's main new and ongoing tasks. HMRC chairman David Varney will be accountable through paymaster general Dawn Primarolo to Parliament for delivery of the remit.

Brown's letter to Varney records that the aim of Revenue and Customs, as set out in its public service agreement, is to "administer the tax and customs control systems fairly and efficiently and make it as easy as possible for individuals and businesses to understand and comply with their obligations and receive their tax credit and other entitlements".

NIC 'really just the same as income tax'
The Telegraph reported on 8 April that Gordon Brown's repeated claims that national insurance is not a tax were undermined by clause 5(4) of the Commissioners for Revenue and Customs Bill, which provides: "In this Act 'revenue' includes taxes, duties and national insurance".

The report claimed that the Bill reclassifies national insurance as "revenue" to be paid directly into the Treasury's coffers.

It said: "The change in the legal description of National Insurance - created in 1911 as a contributory scheme to finance social benefits - could diminish Labour's ability to repeat its manifesto promise not to raise income tax."

It quoted Conservative work and pensions spokesman David Willetts as saying: "The Chancellor likes to claim that National Insurance pays for the health service. But this legislation shows it is really just the same as income tax."

But the Treasury said the clause "just defines for the purposes of the Act".

The Telegraph quoted a Revenue spokesman as saying: "This does not change how this particular cash flow is managed. National Insurance is paid into the National Insurance Fund, which is only spent on benefits and on the health service. The Chancellor has said it is ring fenced for those purposes."

But, the paper added, the spokesman "admitted both those items are also paid for out of general taxation, so substitution is possible. [He] pointed out that unlike income tax, NI is not generally levied on dividends, nor is it usually paid by pensioners."

Andrew Goodall
Editor, TaxZone

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By rc.falconer
11th Apr 2005 11:34

NI & PAYE Not separated on payments now!
From the first NI & PAYE payment for 2005/6 for those employers paying electronically we no longer have to separate the 2 elements in our payments. So how is the treasury planning to manage the cash differently?

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