Surgical operation

27 July 2010

Issue: 4265 / Categories: Forum & Feedback , ESC C16 , Grimsby College Enterprises Ltd v HMRC , IR35 , VATA 1994 , Income Tax , VAT

A self-employed surgeon wonders whether he should carry on his business via a limited company to mitigate his income tax liability, but the health provider for which he works is reluctant to change his contract

For those self-employed now paying 51% tax running their business through a company has many obvious tax benefits.

But where there is a contract between the self-employed individual (a surgeon in this case) and the client (a large ‘provider’) what is the minimum necessary to ‘transfer’ the income to a company?

Clearly if the contract between the provider and the surgeon is changed to include the new company that makes the position fairly clear (although IR35 needs to watched) but if the client won’t change the contract (they say there are too many complexities to do with members’ benefits etc.) can the individual surgeon just ‘assign’ the benefits of the contract to his new company?

If the newly formed company acts as subcontractor to the surgeon you would have the surgeon working for his company working for himself working for the client...

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