We are interested in whether larger corporate taxpayers would use AIM to pay provisional tax and, if so, how they would see it applying to them.
AIM has been designed primarily for small and medium sized businesses. The similarity of the software they use, combined with Inland Revenue’s ability to have an input into how the software is designed has created an opportunity to standardise a set of tax adjustments.
By way of contrast, larger corporate taxpayers tend to have more bespoke systems designed to suit their businesses. It isn’t viable for Inland Revenue to audit each system to gain confidence in the accuracy of the provisional tax payment or have input into their creation. It is also thought that companies with a group structure would be excluded from AIM.
In our experience, most small businesses have minimal tax adjustments. This is in contrast to large corporate taxpayers who make more tax adjustments to their income to determine their end of year tax liability.
We are also aware that many larger corporates taxpayers have more complex tax adjustments that require a year end calculation and so can’t be applied against income during the year. Under AIM this would result in an increased proportion of adjustments in the final provisional tax payment, rather than these being spread throughout the year.