The House of Lords Select Committee on Personal Service Companies (PSCs) was launched on 12 November 2013 to consider “the consequences of the use of personal service companies for tax collection”. A report was then published in June 2014.
The false self-employment legislation proposed at the end of 2013 could force all contractors, including limited company contractors, into paying tax and National Insurance Contributions (NICs) via the Pay As You Earn (PAYE) scheme.
On 20th July 2010, the newly formed Office of Tax Simplification announced that reviewing the IR35 tax legislation would be a top priority. Any simplification of IR35 wold need to provide an alternative regime to tackle the tax avoidance IR35 was originally set up to tackle. Quick fixes to streamline IR35 were unlikely. After much debate the decision was made to keep IR35 but improve it's administration.
On 9th October 2007 the Chancellor announced in his Pre Budget Report that measures would be introduced for 2008-2009 to tackle tax avoidance by 'income shifting.' These were delayed, expected in the PBR in Nov 2008, but then shelved.
These measures were in the wake of the loss of the Arctic Systems (known as 'Section 660a') case by HMRC in 2008. The Revenue tried to attack the tax savings available by married couples who split shares in their company, and subsequent dividends - thus taking full advantage of the tax allowances of both partners.
In June 2007 The Lords select committe called for a radical change to the UK tax system for contractors, highlighting that the current system is overly complex. This section contains special reports regarding this issue, with comment from the UK's leading experts, providing a balanced view of the way forward for contractor taxation.