.png)
.png)
The Treasury appears to have used the Pre-Budget Report to kick its income shifting proposals into the long grass.
It says that it 'firmly believes it is unfair to allow a minority of individuals to benefit financially from shifting part of their income to someone else who is subject to a lower rate of tax - known as income shifting'.
But, given the current economic challenges, the Government 'is deferring action on income shifting and will not bring forward legislation at Finance Bill 2009'. The matter will, however, be kept under review.
Welcoming the news, Andrew Hubbard, CIOT deputy president, said: 'The current system for taxing small businesses is riddled with anomalies and inconsistencies and is need of a radical overhaul - but the income shifting regime would have made matters worse.
'It would have created a huge administration burden on all small businesses, would probably not have brought in significant additional taxation revenues and would have been a massive distraction at a time when businesses need to devote all of their energies to managing through the economic crisis.'
Grant Thornton's Francesca Lagerberg said the announcement was 'a wise move' and that ministers would have had 'nothing to gain by bringing in the new rules in the existing economic climate'.
