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| CURRENT SECTION :: IR35 / IR591 | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Hot on heals of IR35, The UK's small business community is facing a potential new onslaught from the taxman according to the Professional Contractors Group (PCG), who has called on the Government to step in. The PCG is concerned about the Inland Revenue's interpretation of Section 660 - an existing piece of tax legislation which helps determine the principal beneficiary of a business - in other words, the shareholder who receives dividends from company profits at then end of the year. Many independent freelancers form a limited company allocating some shares to a spouse who carries out administrative work for the business. This then allows corporate dividends to be paid at the end of the year, helps the contractor reduce their own earnings and thus stay out of a higher tax bracket. According to the PCG, suddenly the Revenue is arguing that if one of the partners is the principle earner, then all shares should be apportioned to them. David Ramsden, co founder of the PCG said; "This is an attack on small businesses and will be regarded by many as an attack on women's rights to hold shares. We don't believe the government would support such retrograde taxation policy and are asking Dawn Primarolo, the Paymaster General to intervene as a matter of urgency." The PCG believes that existing legislation is vague and the Revenue is interpreting it without government backing. Tax experts admit they've been caught unawares and are joining with PCG, the Federation of Small Businesses for urgent clarification from the Treasury. Feb 17, 2003 Email this article Printer friendly page Previous Page
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