Many jobbing PAYE umbrella contractors will be rather pleased that they chose not to work through their own personal service companies following an ambiguous statement in yesterday’s Budget relating to contractor taxation. Already a chorus of concern has been sounded by a number of prominent industry experts, who fear it may be a knee-jerk reaction to the media feeding frenzy surrounding top civil servants who work through their own limited companies.

No one will be surprised to learn that, as widely predicted, IR35 regulations will remain in place unchanged, and that measures will be implemented in April to improve HMRC’s administration of them. The statement that has squeezed expert adrenals announces that the Government is to consult on “requiring office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged.”

The PCG lost no time in responding to these words, stating that it was “deeply concerned about the ramifications of this proposal on the interim sector and we will seek urgent clarification on what exactly this will mean for freelancers.” The organisation’s MD, John Brazier, said that the plans sounded “ambiguous,” and could have an adverse effect on senior interims. He added that it is “crucial that these legitimate businesses do not suffer as a consequence.”

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