Feeds

Hated contractor tax might disappear

Tax changes could do for IR35

Providing a secure and efficient Helpdesk

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. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
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.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
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?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.