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CIOT says new PAYE/NIC legislation is not needed

Enough with the mad scramble to put new legislation in place to prevent senior executives from using personal service companies as a front for tax aviodance, the Chartered Institute of Taxation says, as we can use the tools that we already have.

The CIOT says that the massive debate currently raging when it comes to finding ways to curb tax avoidance schemes is missing the mark by pushing for new and more complex legislation. Yes, it’s important to prevent scandals such as the one Ed Lester, the chief executive of the Student Loans Company, was caught in: it was discovered he was using a personal service company in some prestidigitation in an effort to pay less in taxes than required.

The main issue here, CIOT says, is that the problem is occurring mainly within the public sector. Writing new legislation to cover the entirety of the employment world, both private and public sectors, is more or less a waste of time and expense, especially when the easiest solution would be to simply extend public sector appointment rules and leave the rest of the economy alone.

The rules concerning agency workers and IR35 already cover these instances of mischief, a CIOT representative said, adding that there’s no reason to intervene in the form of PAYE/NIC deduction legislation. The accountant body has brought this to the attention of the Government in the hopes that someone, somewhere within HMRC that still has half a brain will actually listen to them and realise that, hey, that’s not a bad idea.

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