Off payroll to become on payroll
The government has introduced a high number of measures to ensure that the UK tax system becomes a simple and transparent one, explains the CIPP’s Diana Bruce.
It is all about the right tax at the time for the exchequer which for those of you who know all about the introduction of payroll reporting in real time (RTI) then this will be a familiar phrase. The right tax at the right time is where the government is tackling tax avoidance, tax evasion and tax minimisation.
A review was launched at the beginning of the year into the tax arrangements of public sector appointees with a view to establishing the extent of arrangements which could allow public sector appointees to minimise their tax payments. The review revealed that almost 2,500 of these workers have not actually been on the payroll and in some cases this has been going on for several years. Although the review recognises that there are circumstances where it may be appropriate for an employer to appoint an individual off payroll, the rules associated with employing people off payroll will be tightened from September 2012. The changes include that the most senior staff must be on the payroll, unless there are exceptional temporary circumstances, and that departments should have the right to seek assurance that income tax and national insurance obligations are being met.
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- Taxation of ‘controlling persons’
- IR35 simplified
- Tax and NI implications
- The proposed solution
- Defining a controlling person