Additional bureaucracy

24 October 2001 / Nick Lloyd

Issue: 3830 / Categories: Forum & Feedback , IR35

The Government has made great play of its intentions to reduce the administrative burden for small business, but thus far nothing seems to have been done. Indeed the reverse seems to apply with the increased complexity of P11Ds as a result of the extension of Class 1A National Insurance contributions, increased complexity in pay-as-you-earn through the collection of student loans and the payment of working family tax credits, and the requirement to implement stakeholder pensions.

We have recently come across a further extension to this burden which may be of interest to readers. This is the issue of a notice to one of our clients under section 16 Taxes Management Act 1970 which will require the annual preparation of a return detailing 'payments made in the course of the trade or business for services rendered by persons not employed in the trade or business'. It then goes on to explain that this applies to any services costing over £1 000 where provided to our client by an individual partnership or company. The first return will be required for the year ended 5 April 2002.

Our client runs a small business with a turnover of around £2 million and lacks the systems for the automatic preparation of the information for the return. Preparation of the return on an annual basis will therefore...

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