Danbro is advising composite companies to check they are paying the correct tax and national insurance contributions following an announcement by the Chancellor.

In a clause in this year’s Budget documents, the tax authorities said there was ‘evidence of agencies, contractors and employers requiring workers to use corporate structures… thereby avoiding paying tax and national insurance contributions’.

While this was only briefly mentioned in the Budget, it’s worth taking note the Revenue may be cracking down on how composite companies structure themselves in order to receive the best tax incentives.

Many people in the industry fear this announcement will cause as much controversy as the crackdown on IR35 did among the Revenue and small IT contractors. However this remains to be seen and the best advice at the moment for contractors and composite companies is to simply consult your accountant to ensure you status and contributions are correct. It could also be worth considering adopting a single managed company status which gives the benefits of a composite company, but with a more robust structure.”