A leading taxation body have responded to the governments consultation on the Taxation of Controlling Persons, suggesting that the government should focus on using existing taxation rules rather than bringing in new legislation. This follows previous concerns raised by contractor and freelancer groups, who stated that current IR35 rules already cover the issue.
The Chartered Institute of Taxation (CIOT) gave their thoughts, following similar reaction from groups including the PCG, REC and FCSA. Their main concern was that much of the documented use of senior people working through their own companies to avoid tax has been in the public sector, with the cases of Ed Lester and a number of BBC presenters cited.
CIOT Tax Policy Director, John Whiting, said; “There seems to us to be little need to introduce new rules for the private sector. The consultation document does not identify a particular mischief that is occurring in the private sector that is not already addressed by the IR35 rules and the rules on agency workers.”
He continued, asking the government to consider whether there is a need for the proposed measures, saying that taxing ‘controlling people’ at source is only likely to add complexity to many individuals as well as end users and HMRC.
Mr Whiting finished by suggested that a “practical and proportionate” way forward would be to look at how some of these arrangements with personal service companies are affected by the existing legislation, saying that this information would be straightforward enough for the government to obtain.
ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.