IR35 survives the 2004 Budget

As predicted on UKTECH, today’s Budget does not mean the end of IR35 or the need for products like Freelancers Outside IR35 to help freelancers deal with IR35 issues. However, Press Notice 5 indicates that today’s budget is only the start of their attack on small company owners and their rewards.

PN5 states that “to ensure that targeted tax incentives support the Government’s objectives for growth, enterprise and productivity, the Government proposes to consider the issues raised by the interaction with the tax system of definitions of the income of self-employment, and the remuneration paid to owner managers”

They will do this by way of a discussion paper to be released at the time of the 2004 Pre Budget Report. Clearly the Government realised that they could not make any sweeping changes in time for the 2004 budget – hence the fairly limited change to the taxation of small company dividends. There is more to come next year!

UKTECH will be continuing coverage of the issues relevant to freelancers during the day, with expert comment and analysis.

Kevin Miller, MA FCA