The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Many people supply their services to clients, not directly as a self-employed person, but via a company, known as a personal service company (PSC). The tax and NIC advantages of this way of working are significant. See the Personal service companies ― overview guidance note. Where a PSC is owned by the individual worker, it is likely to be caught by the off payroll working legislation, commonly known as IR35. See the Anti-avoidance rules ― off payroll working (IR35) guidance note. In the years following the introduction of that legislation, a number of providers began to offer PSCs to a wide range of individuals. These providers usually supplied the workers with a contract with clauses designed to avoid IR35, whilst still delivering many of the benefits of a PSC.
The providers also dealt with the onerous elements of running a company, such as calculating PAYE, profits and dividends, and dealing with both Companies House and HMRC. Companies with external providers who supplied these all-encompassing services became known as MSCs, in contrast to PSCs where it is the individual who runs the business.
There is a special anti-avoidance tax regime for MSCs.
If a company is an MSC, the off payroll (IR35) provisions do not apply. Instead, workers in MSCs are deemed to be within PAYE (including NIC) for all of their receipts, including dividends. For this purpose, receipts can include both monetary payments and benefits.
In addition, the reliefs for travel expenses are limited, so that the expense of any travel by the worker to and from the client's premises is normally not deductible for tax purposes. This is in contrast to the more generous rules which apply to PSCs. See the Off payroll working (IR35) ― calculating the deemed employment payment guidance note.
Supplementary legislation and regulations give HMRC the pow
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
Almost all companies will have some loan relationships. However, some items that are commonly assumed to be loan relationships are not (eg outstanding consideration for the sale / purchase of property and inter-company balances relating to unpaid amounts for goods or services, in each case where
Once a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the taxpayer.CorrectionHMRC has the right to amend the tax
This guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax liability falls on the trustees
This guidance note provides an overview of the basic principles of inheritance tax, when it is charged and how it is calculated. It contains links and references to other parts of the module where more details can be found.Transfers of valueInheritance tax is based on the concept of a transfer of