IR35 Staying Ahead

Course aims and objectives

The Chancellor’s 2012 Budget announced that HM Revenue and Customs would be strengthening their specialist compliance teams to tackle tax avoidance using personal service companies. Over summer 2012 the Government has been consulting on the proposal that the ‘engager’ will have to operate PAYE and NIC on payments to office holders who are ‘controlling persons’. If this proposal proceeds in Finance Act 2013 it will result in significant additional costs for companies engaging such individuals via their own personal companies.

HMRC have also issued risk assessment guidance to their Inspectors comprising 12 “business entity” tests to help them identify high risk cases in order that they target their compliance activity. Knowledge of this scorecard approach will help accountants work with their consultant clients to lower the risk of HMRC scrutiny.

The course will include

• Background to the current IR35 personal service company legislation
• Case law surrounding employment status and IR35
• HMRC Employment Status Indicator software
• Calculation if income from relevant engagement that is subject to PAYE and NIC
• Travelling and subsistence rules as they impact on IR35 contractors
• Summer 2012 consultation “The Taxation of Controlling Persons”
• Who is a ‘controlling person’?
• Proposed HMRC risk assessment of personal service companies
• 12 Business Entity Tests to support IR35 risk assessment

You should gain a broad understanding of the current taxation rules for personal service companies and also an awareness of possible future changes. These changes may require the redrafting of contracts with external consultants to ensure that the proposed tax changes do not apply to the relationship.

We also provide a key points version of this course. Please click on this link IR35 Staying Ahead – Key Points for details.