Feeds

Hated contractor tax might disappear

Tax changes could do for IR35

Remote control for virtualized desktops

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. ®

Internet Security Threat Report 2014

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
Inside the EYE of the TORnado: From Navy spooks to Silk Road
It's hard enough to peel the onion, are you hard enough to eat the core?
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
The Heartbleed Bug: how to protect your business with Symantec
What happens when the next Heartbleed (or worse) comes along, and what can you do to weather another chapter in an all-too-familiar string of debilitating attacks?