Income shifting could be on Treasury radar once again
Posted Dec 21, 2010
The tax director of the OTS, in an interview with The Telegraph, says that income shifting may come into the spotlight again, as the tax simplification body reviews all aspects of small business taxation.
Income shifting, whereby couples split business income and reduce their joint tax liabilities, has been on the radar of the Treasury for many years.
Contractors will be aware of the 2007 landmark case where The House of Lords ruled in favour of Geoff and Diana Jones of Arctic Systems Ltd, and rejected HMRC's attempt to introduce a tax hike on family businesses where shareholdings have been split between spouses.
Since then, despite promises made by the previous Government to introduce new legislation to tackle income splitting in April 2008, no further measures have been announced in successive Budgets.
However, speaking to The Telegraph today, John Whiting who heads up the tax simplification body said that he never believed that income splitting had been put to bed as an issue:
"It is in the Dracula category. I don't think anyone ever put the stake through its heart."
"One of the issues is around IR35, and there are others around the employed-self-employed boundary and family business taxation. These are difficulties both from the businesses' point of view and from the Revenue's point of view in terms of policing it."
Although any new legislation to tackle income shifting is only expected to raise £200m per year, it would now appear that contractors can now look forward to renewed uncertainly on income splitting measures, as well as the ongoing review of IR35.
Contractor Services
- Professional Indemnity Insurance - Essential cover from Hiscox
- Helix Management Ltd - Up to 90% retention. Same day payments.
- Contract Experts - ClearSky Accounting on 08000 325 326
- InTouch Contractor Accounting - personal service & clear advice
- Parasol - the UK's favourite umbrella company
- Umbrella Company - 12,000 contractors can't be wrong!
- Together we're stronger! - Join PCG, representing contractors
- Cloud 9 Group - Umbrella Solutions only £27.50 per week
- Qdos - IR35 experts - Providers of low cost contractor insurance
- K & B Accountancy Group - Fixed fee contractor accounting only £75pm
- Free IR35 & Tax Review - Call ICS on 0800 195 3750
Related Articles
|
|
|
|
|
|
|
|
|
|
|
|
|
