TaxPersonal TaxButler and nanny tax dodge closed

Butler and nanny tax dodge closed

Nannies and butlers face action to stop them using the same tax avoidance measures that IT consultants will have with the introduction of IR35.

Link: Budget 2003

The move, which will stop domestic staff using intermediary companies to avoid national insurance and tax liabilities, is bound to hit the wealthy and upper classes who hire household help.

A statement included in Gordon Brown’s Budget measures on Wednesday said: ‘The measure closes an avoidance device whereby domestic workers, who would otherwise be directly employed by the person to whom they provide the service, operate instead through an intermediary, such as a company.’

However, the move immediately prompted puzzlement among tax experts who estimate that the tax revenue to be saved by taking these precautions could only be insignificant.

‘The cost of running and operating a company to avoid taxes in this way far outweigh the possible benefits,’ said Alastair Kendrick, a tax director at Ernst & Young.

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

7m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter