Budget 2012

[Lewis]

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

What are the simplifications?

EDIT - are you sure it's not for companies < £77K?

[simondolan]

Which is fine for a lowly minion like me but gets a lot trickier when you get to more senior people like programme managers or interim managers who can be very important to the organisation.

Important maybe, but that's not the same as integral.

[simondolan]

What are the simplifications?

EDIT - are you sure it's not for companies < £77K?

Fairly sure its for unincorporated businesses under £77k TO

[LisaContractorUmbrella]

Yes it is definitely only for unincorporated businesses - may be extended out to incorporated businesses but no time frame as yet

[psychocandy]

And what happens when that director is found to be legally claiming Child Benefit because he's under the 50k phase out amount, since (I believe) this is based on their PAYE income rather than including any dividends?

"That's not really in the spirit of the tax system" will be the argument.

Clobbered retrospectively - since that's the order of the day - maybe?

Sure I read somewhere that some judge had ruled that no-one had the legal or moral obligation to pay more tax than they had to. In effect, saying that tax avoidance was all above board and that there was no moral argument that the HMRC could use.

[simondolan]

Sure I read somewhere that some judge had rules that no-one had the legal or moral obligation to pay more tax than they had to. In effect, saying that tax avoidance was all above board and that there was no moral argument that the HMRC could use.

Yep - was a fundamental quote used for years. "Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.
Thomas Tomlin, Baron Tomlin, in the UK House of Lords case, IRC v. Duke of Westminster (1936) 19 TC 490, [1936"

Doesn't fit well with today's political correctness does it. The Govt have for years now been deliberately blurring the lines between avoidance and evasion to the extent that now the general public think them to be the same thing

[ir35amnesia]

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..

The tax simplification route will be optional i.e you can carry on with normal rules.

[saptastic]

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

Yes very contradictory.

Also - is it a govt policy to create more ambiguity...
“This is the first time we have seen the term ‘controlling persons’ and the definition of a controlling person will form part of the consultation".

Osborne uses Budget 2012 to plot an addition to IR35 :: Contractor UK

[Nixon Williams]

Yes very contradictory.

Also - is it a govt policy to create more ambiguity...
“This is the first time we have seen the term ‘controlling persons’ and the definition of a controlling person will form part of the consultation".

I think in the example I quoted earlier is exactly what the government have in mind.

Ed Lester is the CEO of the Student Loan Company (a government quango), he was using his own limited company to channel his earning.

After this fact was revealed in the media, the government changed his arrangement (previously agreed with HMRC and Danny Alexander) and placed on the payroll subject to PAYE & NIC.

I would contend that a CEO could be assumed to be a controlling person, if not then who is?

I am sure that after consultation this will become clear, but I do not regard this to be of concern to most contractors.

Alan

[Nixon Williams]

With the announcement that the personal allowance will increase to £9205 in 2013/14 - it was also revealed that the higher rate threshold would again fall, to £32,245 - so in 2013/14 higher rate, 40% tax will kick in on income exceeding £41,450!