TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

Consultation into the Taxation of Controlling Persons

The Government has also launched a consultation aimed at ensuring that ‘controlling persons’ have income tax (PAYE) and National Insurance deducted at source by the engaging organisation.

This follows on from a review by Treasury into the tax arrangements of public sector appointees with a view to ascertaining the extent of arrangements which could allow public sector appointees to minimise their tax payments. The review concluded that there is a lack of transparency around the tax arrangements of public sector appointees, where the worker is not on the payroll of the engaging organisation.

Recommendations from the review are that the most senior public sector staff should be on payroll, and that departments should have the right to seek assurance in relation to the tax arrangements of long term contractors.

Equally the consultation aims to ensure that where people are in a position to control the major activities of an organisation the organisation, whether private or public sector, should be able to have an assurance that the worker who is in a controlling position in the company is meeting their tax obligations.

The Government is proposing to create in legislation a provision which would require the engaging organisation to place all controlling persons on the payroll. This provision would apply even where they might be working through a Personal Service Company (PSC) for other purposes and even if the payments made by the engaging organisation were made to the PSC and not directly to the individual worker.

This would mean the whole amount paid by the engager to the PSC would be treated as remuneration of the controlling person as if they were an employee, effectively meaning that the worker would be taxed in the same way as employees of the organisation.

The consultation document is available at http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_032074with comments requested by 16 August.