Contractors' Questions: What's in the PBR 2008?

Contractors' Question: Which is more likely to emerge in this year's Pre-Budget Report, an attack on umbrella companies or an enactment of the income-shifting proposals, or both!?





Anne Redston, visiting professor of Tax Law at King's College, London: We all know that both income-shifting and travel expenses were on the Treasury's agenda, but that was before Mr Brown moved to a tax-reduction budget model. He has said he wants to stimulate spending and retain more money in the hands of the low paid.



Income-shifting moves money to lower-paid spouses, so introducing new legislation to prevent it would run directly counter to this approach. Generally, too, those who work through umbrella companies are not highly

paid.



And both proposals run the risk of being complicated to implement, and of catching many others, unintentionally, in the tax net.



So perhaps, just perhaps, the economic gloom will have a silver lining for contractors, at least on the tax front.