Crackdown on personal service companies could raise £400m in tax

[AtW]

Seems unnecessary given that the new dividends tax that ignores "archaic" tax credit from very real corporation tax increases tax burden pretty close to PAYE anyway. In fact it increases high enough to contemplate "**** right *** you *****" strategy and moving to some more business friendly country.

[chopper]

It'd "raise" a purely speculative £400m and cost both businesses and the govt how much? Best to wait on a more reliable source, I guess.

IMHO, it would reduce the tax take as independent contractors go permie on typical permie salaries, along with the massively reduced amounts of tax paid on a typical permie salary.

Clearly some of Cameron and Osbourne's cronies at Capita have asked them to work out how to get rid of those pesky independent contractors.

[northernladuk]

Aim, see toes fire!


They really don't understand do they??

To be fair when there are PSC's that claim JSA inbetween gigs its hard to defend.

[jamesbrown]

Same story in the Fail.

[eek]

Same story in the Fail.

Not quite the devil is in the detail.

From the mail's article

A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. But a middle-manager brought in to do maternity leave cover at a firm will in future have to go on the firm’s payroll. The new rules will apply to both private firms and the public sector, where there have been numerous examples of senior staff paid ‘off the books’ in recent years.

Which is rather different from what the guardian says.

I think the thing we have to watch is

HM Revenue and Customs is also devising an online checklist to allow employers to assess quickly whether a contractor should be reclassified as a member of staff.

But I suspect that will be designed with HMRC's new focus to manage projects internally where possible.

So yes this may be something to worry about. Equally it could confirm that all the stuff I've been doing while not wasting time on here hasn't been in vain.

[Tasslehoff]

”A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. ”

[ShandyDrinker]

Same story in the Fail.

Yep, seen it this morning and made a comment. I'm surprised how many people downvoted it!

I guess before the announcement in the Autumn statement they're gauging the level of public support...

[centurian]

”A contractor who uses an agency to find work with a range of IT firms for short periods will still be able to classify themselves as a personal service company. ”

What's 'short periods' though - a month, 3 months, 6 months, a year.

[centurian]

Yep, seen it this morning and made a comment. I'm surprised how many people downvoted it!

I'm surprised that you're surprised.

Lets not kid ourselves. The vast majority of the public view PSCs as outright tax dodging.

[centurian]

What's 'short periods' though - a month, 3 months, 6 months, a year.

But there are understood to be examples of professionals such as lawyers working for one company for a short period of two months. Ministers believe that in these circumstances they should be counted as employees and should pay income tax.