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THE PRE-BUDGET Report was for most people fairly uneventful but for those in the contracting market there was something sinister lurking in the background; a consultation paper Tackling Managed Service Companies was published alongside the Pre-Budget Report. This paper was a follow-up to the comments published in the 2006 Red Book regarding tax motivated incorporations which stated:
'The Government believes that all individuals and businesses must pay their fair share of National Insurance contributions and tax irrespective of legal form. It will continue to review the tax and NICs systems to ensure that this is the case and will bring forward proposals for discussion that are consistent with simplicity for compliant businesses support for businesses in their aspirations to grow and maintaining the attractiveness of the UK as a business location. As the first stage of this review the Government will consult on...
