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The day has finally arrived and contractors will be eagerly waiting to see what the Chancellor, George Osborne, proposes to do with the much hated IR35.
Much hated because it is not always clear to contractors whether they will be caught by it or not and the effects of being caught could mean a large unexpected tax bill.
How will The Bribery Act affect relations between Recruitment Agents and Umbrella Companies when the Umbrella Company is paying a recruitment consultant for referrals?
Due to come into force in October 2011 the Agency Workers Regulations aim to ensure "“the basic working and employment conditions of temporary agency workers shall be, for the duration of their assignment at a user undertaking, at least those that would apply if they had been recruited directly by that undertaking to occupy the same job”.
There had been some specualtion that although contractors working through Umbrella Companies were initially going to be caught by the new regulations the new Tory Government would review this and make them outside their scope (as contractors working through their own limited companies are outside the scope).
The Office of Tax Simplification (OTS) was launched by the Government in July 2010.
The Office has been established to provide advice to the Chancellor on simplifying the UK tax system, with the objective of reducing compliance burdens on both businesses and individual taxpayers.
In the Budget Report the following was said about IR35:
Following publication of the OTS (Office of Tax Simplification) review of small business tax, the Government commits to making clear improvements in the way IR35 is administered. The Government has decided to retain IR35 as abolition would put substantial revenue at risk.
The Office of Tax Simplification has released its initial report into what is often called "The Son of IR35".
http://www.hm-treasury.gov.uk/d/ots_small_business_interim_report.pdf
The findings seem to recommend to either scrap IR35 or keep it and police it better. Amendments and the possible merger of PAYE and NIC's are also cited as providing an opportunity to make the taxation of small businesses fairer.
In summary what they say about IR35 is:
The Office of Tax Simplification are set to report on their review of IR35 today 10th March 2010. The aim is to give the Chancellor 2 weeks to absorbe the recommendations prior to his budget.
In HM Treasury's own word the prupose of the Small Business Tax Review was (http://www.hm-treasury.gov.uk/ots_smallbusinessreview.htm:
The Chancellor has announced that families where at least one parent is a higher rate tax payer will lose their right to receive child benefit from 2013.
90% of the Equality Act came into force on 1st October 2010.
The Act brings together various bits of legislation in respect to equality in the workplace and includes protecting against discrimination on health or gender grounds.
