details of the scheme will be set out closer to the time of implementation, with the price of the new class of National Insurance being set at a broadly actuarially fair rate.
The government will legislate for this scheme at the earliest available opportunity.
CIPP comment This new scheme will not affect the payroll function as the new Class 3A NICs are to be a voluntary contribution. Interesting proposal as the removal of Contracting Out ends, but you can buy more if you want to?
Tax avoidance measures
Since 2010, the government has been relentless in its crackdown on tax avoidance and aggressive tax planning with reforms such as the General Anti-Abuse Rule and disguised remuneration legislation. There are strong signs that the government’s approach is working but a minority of taxpayers continue to seek out unacceptable ways to reduce the amount of tax that they pay. The government will therefore continue to take further steps to close down avenues for both tax avoidance and evasion. As announced in the Autumn Statement 2013, they will: ensure that those with the most in society make a fair contribution, including by introducing capital gains tax on gains made by non-residents disposing of UK residential property clamp down further on tax avoidance and aggressive tax planning, including by preventing employment intermediaries from disguising employment as self- employment to avoid tax, and by introducing a new power requiring taxpayers using avoidance schemes that have already been defeated in the courts to pay the tax they are trying to avoid upfront build on the unprecedented progress it has made in tackling offshore tax evasion and take further steps to tackle criminal gangs and fraudsters, including measures to tackle alcohol fraud and tobacco smuggling increase HMRC’s target for securing additional compliance revenues by a further £3.7 billion by the end of 2015-16, on top of the £120 billion already forecast. The Chancellor has for the last few years highlighted the increasing profile of tackling tax avoidance and tax evasion. Today’s announcement addressed the issue of ensuring that the correct income tax and NICs are paid by employees and employers when offshore employment intermediaries are used. At Budget 2013, the government announced that it would continue to gather evidence about the avoidance of employment taxes to inform future policy decisions. Today the Chancellor announced action to prevent employers using employment intermediaries to disguise employment as self-employment and thus avoid employment taxes and deny employment rights to their workforce. The government will legislate to prevent employment intermediaries from being able to use contrived contracts to disguise the employment of workers. CIPP comment A select committee of the House of Lords is currently conducting a call for evidence into the use of Personal Service Companies and IR35 legislation. The CIPP and the AAT are working jointly to obtain views from their members working within payroll, tax and Offshore employment intermediaries
CIPP Policy News Journal
16/04/2014, Page 33 of 519
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