Chancellor ditches 'controlling persons' proposals

 

Paragraph 2.103 of today's Autumn Statement revealed that the government "has decided not to proceed with the proposal to tax those who meet the definition of a controlling person at source".

The surprise announcement is a result of HMRC’s new approach to policing IR35, along with the measures introduced in the public sector this year, which the government thinks are sufficient to prevent the loss through disguised employment.

The news will be welcome to many advisers, after complaints earlier this year that the knee-jerk response to bad publicity around senior civil servants being paid through personal services companies was a step too far that would further complicate the poorly drafted and ineffective IR35 tax measure.

But for those who still yearn for an end to IR35, the statement said the government will strengthen the existing legislation to "put beyond doubt that it applies to office holders for tax purposes".

Continued...

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Comments
Tax Networks's picture

The alternative view...    1 thanks

Tax Networks | | Permalink

Of course there might just be too many sensitive central and local government PSC controlling persons being engaged? Anyhow, it is now dropped, probably because it was just another subjective judgement call amongst this dogs dinner IR35 legislation.

just a wind up?    1 thanks

The Black Knight | | Permalink

kept someone busy for a week or two?

Did it make any difference whether you pay a government worker more and tax them, or pay them less and don't tax them? Cost would be the same ? Unless it just that it appears on a vat return and in the economic growth figures?

and the government make a fuss about transfer pricing and Libor rate sandals.

Trouble is the civil service is trained in ineptitude and have no idea what to do and our politicians have limited intelligence and no experience of any thing but politics and spin. They perhaps don't realise they need to do something after the newspaper headline.

johnjenkins's picture

Add this    2 thanks

johnjenkins | | Permalink

cost to the £40m wasted on the rail farce, plus all the other crap this Government wastes money on and you could make a nice hole in the deficit. Or at least give it to HMRC to chase companies that they got no chance of getting extra money out of.

Can we expect a reality check

rboggon.yahoo.co.uk | | Permalink

Can we expect a reality check on RTI and Universal Credits?

Watch this space!

silicondale's picture

Not a chance.

silicondale | | Permalink

Not on RTI. not on universal credit, not on rail privatisation, not on any of the other mistakes that have cost us dear. These are politicians we're talking about. No sense of shame, no admission of guilt, no retraction of anything big once it's announced, and above all no resignation when they get it dreadfully wrong.

Shame

The Black Knight | | Permalink

silicondale wrote:

Not on RTI. not on universal credit, not on rail privatisation, not on any of the other mistakes that have cost us dear. These are politicians we're talking about. No sense of shame, no admission of guilt, no retraction of anything big once it's announced, and above all no resignation when they get it dreadfully wrong.

 

Shame we can't pay them to stay at home?

johnjenkins's picture

MP by proxy    1 thanks

johnjenkins | | Permalink

Now that is a brilliant idea,

We pay politicians a retainer to sit at home and come up with ideas on how to save the country. The politician who comes up with any common sense ideas are given points. Once a target has been reached they would be allowed to take their seat in the House of Commons with the normal salary and expenses.

Needs a bit of fine tuning but it would stop silly buggers in high places. 

cfield's picture

Public sector PSCs    2 thanks

cfield | | Permalink

One thing nobody really considered in the row about civil servants running PSCs is that the main "tax" saving is actually employer NI. But as the Government is run out of taxpayers money, surely any employer NI raked in by putting these people on the payroll would just come out of public funds, so I don't see how it would benefit us.

As for the civil servants themselves, they're having to pay extra tax on their dividends on top of corporation tax so the overall tax saving is not huge. The only real saving they make is on employee NI, and that's just 2% above the upper earnings limit.

Of more concern is that fact that putting them on the payroll means they are entitled to a civil service pension and all the other employment rights and benefits. It would make getting rid of them even more difficult.

Maybe we are shooting ourselves in the foot here. Perhaps it is better to hire them through their own companies on 2-3 year contracts. In fact, we should do that with all civil servants really.