Freelancers' group gives advice on family business tax
Mar 03 2008
Advice detailing the new rules against 'income shifting' and how they will affect freelance contractors and consultants has been published.
Members of the Professional Contractors' Group (PGC) will receive guidance on whether the new rules, which come into force on 6 April, apply to them and what action they should take. Non-members can also request a leaflet outlining the basic scope of the plans.
The legislation hopes to prevent the practice of 'income shifting', where business owners share their profits with someone else who does not take an equal role in the business, for example a spouse or partner, in the form of dividends or partnership profits. This means both partners' full tax allowances are used, reducing the amount of tax paid on profits overall.
Managing director of the PGC, John Brazier, said it is important businesses fully understand what the rules will mean and how they should deal with them, according to consultant-news.com.
He describes the rules as 'frustrating' for small businesses because the legislation is 'amazingly broad'.
'The Government's plans rest on fundamental misunderstandings of basic business concepts such as profit, income and risk,' he adds.
The PCG has launched a dedicated website as the focus for the campaign against the proposals - www.familybusinesstax.com
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