News: June 2012

IR35 issues?

If you provide your business services via your own personal service company, rather than being employed directly by the organisation(s) using your services, you will probably know plenty about the infamous IR35. This is a long-standing way that HMRC often tries to argue that the income of your company should be taxed as your earnings.

Countless arguments have arisen over the years about whether or not IR35 applies, and HMRC don’t have a particularly good track record of success when a case is taken to the tax tribunal. Uncertainty abounds, and that should be the last thing anyone wants.

Now up for consultation is a new approach to try to make it easier to decide whether or not IR35 applies. It is by reference to 12 business tests with a score given against each of them to see if the total points bring success!

We will be keeping a close eye on this development for clients who might be affected, and will advise you on an individual basis when the new HMRC approach is closer to being introduced, as changes to the approach are expected from the consultation process.

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