The budget specifically addressed IR35 and said the following:

2.207 Personal service companies and IR35 – The Government will introduce a package of measures to tackle avoidance through the use of personal service companies and to make the IR35 legislation easier to understand for those who are genuinely in business.

This will include:

strengthening up specialist compliance teams to tackle avoidance of employment income;

simplifying the way IR35 is administered; and

subject to consultation, requiring office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged. (Finance Bill 2013).

At Paymatters we think simplifying the overly complicated rules can only be a good thing.

It also appears that the section on controlling persons having to be taxed at source seems to address the issue of key figures who were working at Government departments but not being on the Government payroll. This also ties in with an employment test for IR35.

The complete budget statement is available at http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf