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Fearsome prospect

29 May 2012 / Philip Fisher
Issue: 4355 / Categories: Comment & Analysis , Employees , Income Tax

Will new IR35 guidance have contractors quaking in their boots, wonders PHILIP FISHER


  • Popularity of personal service companies.
  • Business entity test risk factors.
  • Surprising results.
  • Ultimate purpose of the new guidance.

Commentators regularly accuse the government of using multiple sledgehammers to crack tiny nuts when it attempts to introduce effective anti-avoidance legislation in areas such as disguised remuneration and charitable donations.

When it comes to its newly published deliberations on the intermediaries legislation the analogy might better be expressed by considering a newcomer to the boxing ring taking on Muhammad Ali.

HMRC’s latest document Intermediaries legislation (IR35) introduces a set of ‘business entity tests’ that are designed to identify whether personal service companies might potentially be subject to the IR35 legislation.

It is emphasised from the start that the use of this guidance will be entirely voluntary which might suggest to some...

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