PBR 2007: Anti-avoidance measures

Posted by AccountingWEB PM | on Tue, 09/10/2007 - 18:05 5217 1 comment

The government's continual fire-fight in their crusade against tax avoidance means this year's PBR features a whole host of retrospective measures. Here's the latest on how the Treasury hopes to plug a few holes in their tax dyke:

PBRN 02 - NI contributions exemptions
The NIC exemption for holiday pay is due to be withdrawn. Legislation to remove this exemption completely will be laid on 9th October and take effect after 30th October.

Continued...

Income shifting

davidwinch | Wed, 10/10/2007 - 08:45 | Permalink

I may be wrong here but I am thinking that the new rules on income shifting will be, for small businesses at least, the biggest thing to come out of this PBR (bigger even than the CGT changes).

It seems that the new rules will apply both to companies and partnerships.

The government says that the new rules will relate to "settlements" and to deductible business expenses.

Could that mean that, in the case of a company, the dividend will be taxed on the so-called settlor and, in the case of a partnership, the profit assessable on the 'working' partners will include any profit share attributable to 'non-working' partners?

The changes are to take effect from 2008-09, so will this mean an unusually high tax bill in January 2010? Can someone remind me when we expect the next general election?

David