TaxAdministrationTaxman ‘must define accountants’

Taxman 'must define accountants'

The government may need to clarify what it means by 'accountants' as part of its crackdown on the composite company sector, a leading adviser has said

Composite providers have been plunged into turmoil since the Budget
announcements on the tax vehicles, with some opting to pull out of the industry
and others looking ever deeper for loopholes in the tax rules.

The government sought to clamp down on the tax dodges by identifying
companies through the provider of the off-the-shelf structure. But the
legislation includes an exemption for accountants.

Anne Redston of the CIoT said further guidance might be needed to define
accountancy services in the context of the rules. ‘We might need further comment
so people are clear on this. It will depend on what they mean by accountancy
services.’

HM Revenue & Customs reiterated its
view of the legislation this week, saying that it was not intended to catch
those ‘genuinely in business on their own account’ and accountancy services
provided to them.

‘The legislation addresses the discrete issue of those seeking to avoid
employed levels of tax and NICs by providing services through a company which is
promoted and facilitated in a way quite distinct from professional accountancy
services,’ said an HMRC spokesman.

One provider, Giant Group, has pulled out of the market. ‘All specialist
providers of services to one-man limited companies are caught, without
exception,’ said MD Matthew Brown.

But another, Brookson, indicated that it intended to carry on, claiming an
exemption based on offering ‘accountancy’ services.

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