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Pass the parcel

09 July 2013 / Nicola Stone
Issue: 4410 / Categories: Comment & Analysis , Employees , Income Tax

How should employees of offshore intermediaries be taxed?

KEY POINTS

  • Effect of IR35 on personal service companies.
  • Public sector workers found to have offshore employers.
  • Will the end client be obliged to tax the employee’s earnings?
  • HMRC are passing the buck to the end client and intermediary.

Sometimes I think the development of tax legislation is a bit like a game of pass the parcel as it would perhaps be played at Hogwarts. Layers are added rather than taken away and the gift is not necessarily one you want to receive.

Let me take you back to March 1999 and the advent of what has become known as IR35.

As employment rights had increased over the years employers were concerned about the costs and legal aspects of employment and about the removal of flexibility from their relationship with...

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