- Churchill Tax
Paye – Controlling Persons Test Scrapped
Extra PAYE burden
The planned introduction of special rules for taxing individuals who can exert control over a business have been scrapped. This would have meant that, for example, PAYE would have been enforced on company managers who provided their services on a freelance basis.
IR35 is enough
HMRC says the changes in the way it monitors IR35 will be sufficient without special rules for self-employed “controlling persons”. This is good news, but it hints at tougher IR35 rules to come when the new tax year starts in April. Watch this space!
Conclusion
The special rules which would have forced businesses to deduct PAYE tax and NI from fees paid to freelance managers etc. will not now be imposed. Instead, HMRC will tighten its policing of current and new IR35 rules, probably from April.