HMRC Self Assessment update

6 Jul 2017

In response to the consultation the CIOT notes that the exclusion may be easily avoided, either by appointing another director (e.g. a spouse, civil partner, other family member or friend) and paying that person a token wage or by arranging payments of earnings so that the worker is not a director when all of the payments are made.

In essence, we believe that the draft regulations are open to abuse in their current form and will simply have the effect of penalising those single director-employee limited companies that are unable to, or do not know that they could, appoint another person as director or employee in order to claim EA.

The consultation closes/closed on 3 January 2016 and final regulations are expected to be laid before Parliament, and guidance issued by HMRC on eligibility criteria for the employment allowance, by March 2016.

Technical Team