Will the 2012 Budget impact Personal Service Companies?

There has been a big stink brewing around one-person limited companies (or Personal Service Companies) ever since it was discovered that Student Loans Company Chief Exec Ed Lester was funnelling his pay package through a limited company, thereby saving himself tens of thousands of pounds in unpaid income tax and National Insurance Contributions. From there the situation only got worse, as a volley of Freedom of Informations requests uncovered more Whitehall staff avoiding tax, and even those at local council level. For freelancers the situation has become increasingly frustrating as the media railed against Personal Service Companies while failing to realise many freelancers and contractors operate them legitimately, and have had the spectre of an IR35 investigation – HMRC’s method of dealing with so-called disguised employees – hanging over them for years. With the 2012 Budget almost upon us, the possibility that George Osborne will directly address the continued abuse of Personal Service Companies by civil servants is high – however freelancers and contractors using them legitimately more than likely have nothing to worry about. The difficulty for HMRC and George Osborne will be identifying those who are legitimately self-employed and those who are disguised employees. In the case of [...]

Source: http://www.freelanceadvisor.co.uk/legal-advice/will-the-2012-budget-impact-personal-service-companies/

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