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The Revenue has responded to representations in relation to anomalies in the legislation relating to personal service companies. As a result some amendments are to take effect from 6 April 2002.
The first concerns expenses met by the worker and reimbursed by the intermediary (usually his company). Previously the worker could not claim any relief at all for the expenses, but the legislation is to be amended to allow relief.
The Revenue has responded to representations in relation to anomalies in the legislation relating to personal service companies. As a result some amendments are to take effect from 6 April 2002.
The first concerns expenses met by the worker and reimbursed by the intermediary (usually his company). Previously the worker could not claim any relief at all for the expenses, but the legislation is to be amended to allow relief.
Secondly, those who work through service companies and who fall within the intermediaries legislation, will be entitled to the same amount of tax-free payments for business mileage in vehicles provided by the service company as employees under the approved mileage allowance payments scheme.
The draft amendments to the service company legislation were published on 15 March, and these will take effect from 6 April 2002. The tax amendments will be included in this year's Finance Bill. The parallel amendments to the National Insurance Regulations are covered by two Statutory Instruments which have also been laid before the House of Commons.
The regulations are the Social Security Contributions (Intermediaries) (Amendment) Regulations 2002 (SI 2002 No 703) and the Social Security Contributions (Intermediaries) (Northern Ireland) (Amendment) Regulations 2002 (SI 2002 No 705). Copies are available from the Stationery Office.
Two further amendments to this legislation also published on 15 March mean that service companies which cease trading in the year are able to claim appropriate relief in their final corporation tax accounts for the deemed payment calculation. Partnerships which reimburse expenses a partner has incurred personally will be able to claim relief for those expenses in the same way as a service company.
(Source: Inland Revenue news release dated 15 March 2002.)
