'No change' on income shifting

Posted on 25 November 2008

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Chancellor Alistair Darling has chosen not to introduce the planned family business tax on the practice known as "income shifting".

The Professional Contractors Group (PCG) has expressed satisfaction at the decision to delay any legislation in this area likely to affect contractors working for umbrella companies.

PCG managing director John Brazier said contractors and other small firms were pleased that the government had "reached the right decision", although he did express concern at the reasoning behind it.

He added: "We needed to see a firm commitment from the government to drop the proposals and an acknowledgement that they were wrong; instead, we have a commitment to defer them and keep them under review owing to the economic circumstances."

Mr Brazier said he was pleased that no new legislative proposals relating to the claiming of contractor expenses through umbrella companies were announced in the pre-budget report.

As expected, Alistair Darling announced that a planned increase in corporation tax for small businesses would be differed when he addressed the commons yesterday afternoon (Monday November 24th).

Category: Tax & Legislation News

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