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| CURRENT SECTION :: IR35 / IR591 | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Gordon Brown announced in his budget on 17th March the intention to introduce a scheme which will force any Company setting up and marketing "tax avoidance schemes", to register with the Revenue. The Finance Bill published on 8th April gave us some more details about the new measures. The favourite IR35 avoidance schemes (EBT's, foreign loans etc) are certain to be hit. The new rules will require those who devise and market certain schemes and arrangements to disclose information on these to Inland Revenue. Disclosure will be required where a main benefit is the obtaining of a tax advantage, and where further conditions (to be set out in regulations) are met. These conditions are designed to target schemes and arrangements based on financial products and employment-based products. Promoters will be provided with a unique registration number to identify schemes disclosed. Users of schemes and arrangements covered by the new rules will normally be required only to include the registration number of the scheme on their company,partnership, individual, trust or employer return. There are specific circumstances where users will be required to provide details of the scheme to the Inland Revenue themselves. These are where they have used a scheme purchased from an offshore promoter and where the scheme is self-devised rather than purchased from a promoter. Where a scheme has been purchased from an offshore promoter, and that promoter has made a disclosure, users will be required to disclose details of the schemes shortly after the scheme was purchased or first implemented. As with most tax law, the measuress are not at all clear. For example who defines "the obtaining of a tax advantage"? Presumably anything we do which does not involve us paying the highest amount of tax possible could be covered by this? The penalties for not registering or notifying will be up to £600 per DAY. Further detailed guidance on all aspects of the new measures will be available on the Inland Revenue website after the Bill receives Royal Assent which is expected to be in July 2004. Apr 13, 2004 Email this article Printer friendly page Previous Page
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