This is not a consultation

September 3, 2012

There was another consultation which closed last week, on the Office of Tax Simplification’s proposal that there should be a “disincorporation relief”.  This is aimed at the one and two person businesses which were advised by their accountants to form themselves into companies to take advantage of the lower rate of corporation tax and who now find themselves mired in the red tape of running a company and would like to get out of it.

It’s a worthy idea, I’m sure – but a damn fool way of legislating it.  If you want to ascertain the views of small businesses, you don’t find out by sticking a formal consultation document onto the HMRC website.  You might just as well put the condoc in the bottom drawer of a filing cabinet in a disused basement office marked “beware of the leopard”.

Here’s what I sent, although I made a mistake in the third paragraph where I said that the audience for the consultation wasn’t specified – the desired consultees are in fact listed in 1.4:

The Government is interested in views from a range of audiences, including individual businesses and their representatives, as part of this consultation. It is also interested in views from insolvency practitioners reflecting the links to the Companies Act.

But then, since my email (sent to the address cut and pasted from the condoc) never actually reached its destination as the address is “not found”, it probably doesn’t make much difference either way.

Delivery to the following recipient failed permanently:


Technical details of permanent failure:
DNS Error: Domain name not found

So, waves hopefully to HM Treasury, (you DID pay your broadband bill this month, right?) and…

This is an individual’s response and will also be published in due course, with commentary, on my blog, http://tiintax.com.

I’m afraid I’m completely confused by this consultation. You say in chapter 7 (7.2) that “the consultation is a call for evidence regarding how to help small companies disincorporate”, but I cannot see how you are going to acquire such evidence. The consultation is written in a technical register suitable for communicating with fellow tax professionals and not in the plain English you would use to communicate effectively with micro businesses.

You do not specify at what readership the consultation is aimed, but you appear only to have published it on the government website where – if you’ll forgive me – it’s only likely to be read by “the usual suspects” – professional and interest groups (I am attempting to respond to all the government’s tax consultations as part of a blog project so would include myself in the “interest group” category here). But what you’re not going to do, is reach the small businesses who would be affected by any disincorporation relief.

Given the costs involved (both for the government and for professional and interest groups) in conducting a proper consultation exercise I have to say that I feel this initial stage of consultation would have been better served by an alternative methodology such as the government’s own Small Firms Impact Test. I would be interested to learn whether any such group was in fact convened?

As I said, this isn’t a consultation, this is box-ticking.


  1. […] team conducting the consultation into the disincorporation relief got in touch last week and, with permission, I’m posting their reply. Thanks for your […]

  2. […] A poorly-targeted consultation: disincorporation relief […]

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