Feeds

Hated contractor tax might disappear

Tax changes could do for IR35

The essential guide to IT transformation

IR35 – the tax on one-person service companies – might be revoked by upcoming changes to UK tax law.

The quango tasked with advising Chancellor George Osborne said it was difficult to know what to do about IR35 because of a lack of solid data.

The Office of Taxation Simplification (OTS) said there was no reliable data. HMRC said IR35 only applied to 9,500 people in 2008/2009, down from 30,000 the year before.

Anti-IR35 lobby group the Professional Contractors Group however reckons there are 1.4m freelance workers in the UK, although this includes people not hit by the tax.

Any change to IR35 could prove irrelevant anyway if Osborne accepts the OTS's recommendation to unify tax and National Insurance contributions.

The quango did dismiss IR35 as ineffective for both the Exchequer and for contractors. It also noted that the risk of an IR35 investigaton by the Revenue was minimal.

The OTS said the law was too simple to be applied to a varied workforce.

The law, much hated by IT contractors, was passed in 1999. It stopped one-man service companies paying themselves low wages, with limited National Insurance payments, but stonking share dividends, which do not attract NI payments.

The true impact of the tax is hard to judge because many contractors now work through umbrella companies rather than their own limited companies.

George Osborne will consider the interim report which also looks at other aspects of small business taxation, including how smaller firms which trade internationally pay VAT, and simplifying the tax rules which take small companies the most time to deal with.

You can download the full OTS interim report from here. ®

Next gen security for virtualised datacentres

More from The Register

next story
BBC: We're going to slip CODING into kids' TV
Pureed-carrot-in-ice cream C++ surprise
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
Twitter: La la la, we have not heard of any NUDE JLaw, Upton SELFIES
If there are any on our site it is not our fault as we are not a PUBLISHER
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
Facebook to let stalkers unearth buried posts with mobe search
Prepare to HAUNT your pal's back catalogue
Ex-IBM CEO John Akers dies at 79
An era disrupted by the advent of the PC
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?