As you may know, in response to the recent high profile cases of senior public sector appointees (such as Ed Lester at The Student Loans Company) and others being paid through intermediaries (usually personal service companies), HMRC have launched a consultation on the taxation of "controlling persons".

The main proposal is that (notwithstanding that they are not employees) individuals with the requisite level of control to direct the activities of an organisation who are engaged at a senior level (whether or not through an intermediary) should be taxed as an employee and placed on the payroll.  Accordingly, where an organisation engages a "controlling person", the engaging organisation should deduct income tax and NICs at source from any payments made, whether direct to that person or via an intermediary.

This ensures that the taxation of the "controlling person" is transparent to the engager (which would not be the case under the current IR35 rules dealing with intermediaries).

This proposal will inevitably add further unnecessary complexity to the tax system, and technically the current  IR 35 rules already counter the mischief at which the new rules are aimed.  Fox Williams will be responding to the consultation and we are looking to include the views of subscribers to  To give your view, please click here. Please pass this link on to your contacts or colleagues who might also have views to express.  All the results are completely anonymous, and we will be publishing the results in a future edition of this newsletter. 


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