Budget News: Darling shelves income shifting legislation
Article Date: Mar 12 2008The Chancellor has delayed draft legislation intended to crack down on income shifting, a practice family businesses use to lighten their tax burden. The move, which was not mentioned in Alistair Darling's Budget speech, will be welcomed by growing enterprises concerned about the financial and administrative implications of tighter regulation in this area.
Paul Webb, tax partner at accountancy firm Robert James Partnership, tells GrowthBusiness: ‘Companies will still have to look very carefully at their tax strategy in respect of non-working partners.
‘But it does give them a year’s grace when they will not have to worry about the administrative burden and can retain some flexibility in their tax arrangements.’
Richard Mannion, national tax director at financial services group Smith & Williamson, comments: ‘The current rules mean that the playing surface is not level. But that is mostly because of the amounts of sticking plaster applied over a long period of time.
‘Rather than apply yet more sticking plaster, what we need is a proper root-and-branch review of the tax rules for owner managed businesses.’
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