More tightening on personal service companies
It is probably fair to say that HMRC has had little success in challenging personal service companies under the IR35 provisions. The recent reports from both the Office of Tax Simplification and the House of Lords show that IR35 is not effective. Non-compliance in this area is estimated to cost over £400 million a year.
The government has asked HMRC to look at how to improve the effectiveness of existing IR35 legislation with a view to finding a solution that both protects the Exchequer and improves fairness (good luck with that!) Although the changes in rates of tax on dividends have started making this less tax effective.
Date: 8th July, 2015
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