Reply to: Arctic Systems in lords

[Bluebird]

Depressing

So how quickly can the law be changed, assuming they rush it through, which I assume they will? Do we have till the next budget?

There's a budget in the autumn...

[Lewis]

exchequer secretary to the treasury Angela Eagle said in a statement: "It is the government's view that individuals involved in these arrangements should pay tax on what is, in substance, their own income and that the legislation should clearly provide for this.

"The government will therefore bring forward proposals for changes to legislation to ensure this is the case. In the meantime, HMRC will apply the law as elucidated by the House of Lords and will be providing guidance in due course."

Depressing

So how quickly can the law be changed, assuming they rush it through, which I assume they will? Do we have till the next budget?

[pisces]

Law To Be Changed?

http://www.thisismoney.co.uk/small-b...&in_page_id=10

I wonder if this will affect single contractors as well?

[Robot]

Responding to the ruling, ....

exchequer secretary to the treasury Angela Eagle said in a statement: "It is the government's view that individuals involved in these arrangements should pay tax on what is, in substance, their own income and that the legislation should clearly provide for this.

"The government will therefore bring forward proposals for changes to legislation to ensure this is the case. In the meantime, HMRC will apply the law as elucidated by the House of Lords and will be providing guidance in due course."

[dude69]

But I'm not sure that gifted or purchased are the same as the original distribution on co. set up.

Any ideas? My company has 100 ordinary shares of £1, and (when set up) distributed 1 share to me and 1 share to the missus. We both get out our ~£37k a year.

[ASB]

Any income that can reasonable be attributed to your work for a particular client on a caught contract is caught by IR35, even if you own less than 5%. If IR35-avoidance was as easy as getting 20 contractors together it would never have been a problem.

http://www.opsi.gov.uk/acts/acts2000/00017-av.htm#sch12

What you say is correct but:-

20 people all with 5%. Business therefore provides many people to many clients.

Everybody gets some sort of salary (small). The salry is outside the regs because it is subject to schedule E.

Now, everybody has the same ordinary shares and consequntly the same dividends. The requirement for liability - assuming no material interest which 5% is not - is:-

"(ii) can reasonably be taken to represent remuneration for services provided by the worker to the client."

Now, I don't think (perhaps I am just a born optimist) that the dividends would be caught by this. They represent remuneration as a reuslt of the collective efforts of 20 people to 'n' clients.

It would be difficult to set up a working structure along these lines though. For ease lets suppose the limit is 50% and you generate 100k of revenue but me only 50k.

Assuming no costs we get 75k each. i'd be pleased but you wouldn't.

If we then said Ok, I'll have no salary and you can have 50k then we would both get 50k - but in this case it would fail the test.

[Old Greg]

That's what it says ...



(http://www.pcg.org.uk/cms/index.php?...=2712&Itemid=1)

But I'm not sure that gifted or purchased are the same as the original distribution on co. set up.

[Lewis]

From reading the PCG's analysis, it seems to me that it doesn't matter how the share distribution ended up as it did (gift of a share to spouse vs. forming the co. with the share ownership split for the beginning). Any thoughts, anyone?

That's what it says ...

"Although Diana Jones bought her share in Arctic Systems, rather than being directly given it by Geoff, today’s judgment treats this purchase as a gift, on the grounds that it was only possible because Geoff allowed Diana to buy the share. Gifted and purchased shares are therefore both within the scope of the exemption for gifts between spouses. "

(http://www.pcg.org.uk/cms/index.php?...=2712&Itemid=1)

[TheFaQQer]

would be nice to get artic to post on here

[Old Greg]

From reading the PCG's analysis, it seems to me that it doesn't matter how the share distribution ended up as it did (gift of a share to spouse vs. forming the co. with the share ownership split for the beginning). Any thoughts, anyone?

[malvolio]

Ha the PCG don't get mention in the text except for the related weblink - the FSB do though

Yes, irritating or what?

They do get noted in most of the real press though.

[fzbucks]

http://news.bbc.co.uk/1/hi/business/6915359.stm

Ha the PCG don't get mention in the text except for the related weblink - the FSB do though

[fzbucks]

Yes, it is true. But the scheme you propose is likely to fail if you read the small print.

But 20 people each with 5% of newco would work. Provided they are not connected, all receive the same dividends etc. Oh and it's likely that the combined profit would exceed tohe small companies rate of CT anyway.

Haven't they scrapped the small company CT rate anyway?

[RightLaugh]

would be nice to get artic to post on here

[Gros]

what is the implications of the win for the average man in the street contractor? is it just to do with married contractors, or have i got my head up my ?!

Yeah what he said.... any implications for us one man bands here?