Budget 2012

[Nixon Williams]

IR35 gets a mention in the Budget Report:

2.207 Personal service companies and IR35 – The Government will introduce a package of measures to tackle avoidance through the use of personal service companies and to make the IR35 legislation easier to understand for those who are genuinely in business. This will include:
strengthening up specialist compliance teams to tackle avoidance of employment income;
simplifying the way IR35 is administered;
and subject to consultation, requiring office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged. (Finance Bill 2013)

I think the last part is aimed at the public sector people who have been using companies rather than being on the payroll.

Alan

[kingcook]

subject to consultation, requiring office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged.

This last bit scares me. It sounds like the client will be made responsible for deducting taxes before paying us our invoices

[northernladuk]

This last bit scares me. It sounds like the client will be made responsible for deducting taxes before paying us our invoices

Are you not engaged by your LTD to carry out work at the LTD's clients though?

How can the client know what our tax situation/pay scales are to deduct the right amount from the fee? Needs more info before worrying too much I reckon.

[simondolan]

IR35 gets a mention in the Budget Report:



I think the last part is aimed at the public sector people who have been using companies rather than being on the payroll.

Alan

Possibly, and it is subject to consultation. I cannot see how though, by definition, a contractor can be integral to an organisation?

[BrilloPad]

I think the last part is aimed at the public sector people who have been using companies rather than being on the payroll.

When Gordon Brown stood up in 97/98 to announce the beginning of IR35 he said "we want to stop people walking out of a job as a permanent and in the next day as a contractor" or words to that effect. IR35 was very different when it came out.

[Jog On]

Sounds like they are cracking on with the IR35 plans we already knew about and the last bit is new - maybe to appease the daily mail crowd? I don't see how they could enforce such a rule, unless the organisation by which they are engaged were HMG?

I'm more concerned about the tax simplification for companies >£77k..

[Chugnut]

I'm more concerned about the tax simplification for companies >£77k..

WJOS

The "integral to the running of an organisation" is the key part. Your average contractor will certainly never fill this criteria, whatever their delusions of grandeur may tell them.

They're more concerned with the cases from the public sector which made the news recently.

[Nixon Williams]

I cannot see how though, by definition, a contractor can be integral to an organisation?

I think they are aiming this at the likes of Ed Lester of the Student Loans Company!

[simondolan]

I think they are aiming this at the likes of Ed Lester of the Student Loans Company!

So you think a case where a director of a large Ltd uses a PSC to avoid NI?

[LisaContractorUmbrella]

So you think a case where a director of a large Ltd uses a PSC to avoid NI?

Yep makes perfect sense - office holder integral to organisation must have PAYE deducted by said organisation - this bit certainly for Public sector PSC's. Personally I would be more concerned about their intention to 'simplify the administration of IR35' - sounds like another sledge hammer to crack a nut job.

Still as it's going to consultation I can't imagine too much will change before the next budget