Chancellor may be going after Composite companies in PBR

[BobTheCrate]

From Shout99

I'm a bit rusty on this now but I'm assuming composite companies are 'umbrellas'.

Talk of NICs becoming applicable to dividends paid from composite companies or 'forcing' a greater proportion of remuneration to be paid as PAYE.

I actually think it would be rather sweet if Gordon Brown's punitive tax measures actually ended up destroying the traditional contracting model altogether. Wouldn't half shake up the client mentality, the agencies, not to mention the beleaguered IT temps.

[Lucy]

This is hardly news. It was announced in March.

"At the time of the Budget in March 2006, it was announced: "The Government believes that all individuals and businesses must pay their fair share of NICs and tax, irrespective of legal form. It will continue to review the tax and NICs systems to ensure that this is the case and will bring forward proposals for discussion that are consistent with simplicity for compliant businesses, support for businesses in their aspirations to grow and maintaining the attractiveness of the UK as a business location. As the first stage of this review, the Government will consult on action to tackle disguised employment through managed service company schemes." "

[Forumbore]

From Shout99

I'm a bit rusty on this now but I'm assuming composite companies are 'umbrellas'.

Talk of NICs becoming applicable to dividends paid from composite companies or 'forcing' a greater proportion of remuneration to be paid as PAYE.

I actually think it would be rather sweet if Gordon Brown's punitive tax measures actually ended up destroying the traditional contracting model altogether. Wouldn't half shake up the client mentality, the agencies, not to mention the beleaguered IT temps.

Dont overrate the importance of the "traditional contracting model". It is the clients that call the tune not contractors. It may interest you to know that the general perception of contractors is that we are a necessary evil. The key to any business is how best to provide a service to clients that takes away problems.

[DodgyAgent]

From Shout99

I'm a bit rusty on this now but I'm assuming composite companies are 'umbrellas'.

Talk of NICs becoming applicable to dividends paid from composite companies or 'forcing' a greater proportion of remuneration to be paid as PAYE.

I actually think it would be rather sweet if Gordon Brown's punitive tax measures actually ended up destroying the traditional contracting model altogether. Wouldn't half shake up the client mentality, the agencies, not to mention the beleaguered IT temps.

Here is the statement of a contractor who is full of his own self importance.

[bobhope]

I think it's time for the Darth Vader impression again:

tax payer (Princess Lea) : The tighter you squeeze, the more star systems, err I mean tax payers will slip through your fingers.

Brown (Vader): Not after we demonstrate the power of the new S660a Legislation

[BobTheCrate]

Dont overrate the importance of the "traditional contracting model" It is the clients that call the tune not contractors.

I fail to see how my remarks contradict what you correctly say. Hence the use of my term 'IT temps'. Not because that is how contractors necessarily prefer to work, but because that is how the overwhelming bulk of clients at the top of the chain insist.

If El Gordo took measure to tax any benefit out of contracting - what better way to shake the whole tired traditional model up ?

Here is the statement of a contractor who is full of his own self importance.

Nice to hear from you again ol' man.

Ironic how an intelligent man as you, not for the first time, draws the wrong conclusion because of a very clumsy assumption.

[cojak]

Ooh, Ooh - does that mean that the nice man on the phone who said that I can keep 95% of my earnings without all that hassle of keeping receipts and accounts ('cos he'd do them in the Isle of Man) might be in Gordon's sights????

A. Newbie

[cojak]

Nice to hear from you again ol' man.

Ditto, DA

[Newby]

I am surprised that someone hasn't mentioned this....

A Composite company = one limited company with multiple contractors (little if any attention paid to IR35

An Umbrella company = Effectively Paye with the ability to offset expenses against your income. A relatively tax efficient solution if you are inside IR35.

Composites have been mentioned by Gordo for years it is assumed by Gordo and the revenue(probably correctly) that they are created to make it harder for the revenue to prove a contractors IR35 status, hence the perpetual mentions in the budget and pre budget speechs. They assume that they help tax evasion which in there opinion is illegal!

nowt to worry about if you run your own!!!

[Gonzo]

Composites have been mentioned by Gordo for years it is assumed by Gordo and the revenue(probably correctly) that they are created to make it harder for the revenue to prove a contractors IR35 status, hence the perpetual mentions in the budget and pre budget speechs. They assume that they help tax evasion which in there opinion is illegal!

nowt to worry about if you run your own!!!

Tax evasion is illegal. Tax avoidance is not (well it never used to be before this lot got in... )

Gonzo in pedantic mode.