Is your personal service company at risk?
The 2012 budget statement announced proposals to attack the tax status of some personal service companies:
‘The Government is bringing forward a package of measures to tighten up on avoidance through the use of personal service companies and to make the existing IR35 legislation easier to understand. This will include HMRC strengthening specialist compliance teams, simplifying the way IR35 is administered, and consulting on proposals which would require office holders/controlling persons who are integral to the running of an organisation, to have PAYE and NICs deducted at source.’
Following publicity over public servants paid via personal service companies, the Government aims to ensure that directors and senior ‘staff’ are treated like employees for tax purposes.
If this might affect you, you may want to take advice now.