Chancellors Autumn Statement on IR35

5 December 2012

The Chancellor of the Exchequer has just completed his Autumn Statement on how the UK is going to manage it's deficit.

Regarding IR35 the only change is if the person operating through their own limited company is a controlling person at the company where they are performing their services. Initially the plan was that any controlling person would have to have PAYE deducted at source. This has now been dropped:

2.103 The taxation of controlling persons – The Government has decided not to proceed with the proposal to tax those who meet the definition of a controlling person at source. This is because HMRC’s new approach to policing IR35, along with the measures introduced in the public sector this year, are sufficient to prevent the loss through disguised employment in this way. However, the Government is strengthening the existing intermediaries’ legislation (IR35) to put beyond doubt that it applies to office holders for tax purposes. The Government will keep this area under review. 

Regarding Tax Avoidance schemes offshore and loan tax avoidance schemes seem to be being addressed:

2.99 Offshore evasion strategy – The Government will publish a comprehensive offshore
evasion strategy in spring 2013.

2.100 Offshore capability building –The Government will establish a centre of excellence on
tackling offshore evasion, aimed at building HMRC’s offshore capability, making better use of
 HMRC data to identify tax evaders, reviewing HMRC’s legal powers in this area and developing a
more proactive approach to international engagement to tackle evasion.  

And;

2.111 Avoidance schemes involving loan relationships and derivatives – With effect from 5 December 2012, the Government will close down three corporation tax avoidance schemes involving financial products. 

 The full Statement is available at:

http://cdn.hm-treasury.gov.uk/autumn_statement_2012_complete.pdf