London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Service companies

I am getting irritated about the current media coverage on government officials and BBC presenters being paid via service companies.  I read that the Treasury review on the use of service companies is expected to conclude that such schemes must end for full-time permanent staff, even if the arrangement led to a financial gain for government departments (emphasis mine).  Am I the only person who believes that if a worker agrees to have his fees paid to a service companywith a 13.8% saving on those fees to the engaging company ("the employer")the employer should accept the offer?

Where the employer is a government department it can always notify HMRC of the arrangements.  There are provisions in place to tax service companiesso they have to pay PAYE on the fees as if they were salary, if the circumstances indicate an underlying employer/employee relationship.  

Surely a proper application of the law would yield the correct tax result without increasing government costs at a time when we can least afford it.

 

 

 

Date: 29th February, 2012
Author: Cathy Corns

SHARE THIS

Articles from this Author

Contact Business Service Partners

Choose from the drop down menu below to select a Partner to contact.

Tweet

“Good luck to everyone who has also made it as a finalist, I look forward to awards evening later on in the year”-L… twitter.com/i/web/status/8…

Michael Lapham shortlisted in the Money Management Financial Planner Awards 2017 bit.ly/2fL8VXBtwitter.com/i/web/status/8…

Follow

LinkedIn

For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn