Government to rewrite employment tax rules

NEW anti-avoidance measures to reduce employment tax evasion were introduced by chancellor Alistair Darling yesterday, with the government set to create new legislation next year.

Employee benefit trusts, alternative pension structures and geared growth on share arrangements were some of the areas Darling said the government will focus on during consultations this summer.

The measures are in response to recent moves made by employers to mitigate heavy taxes imposed on high-net worth individuals, including the 50 per cent top rate tax and higher tax rates on pension contributions both introduced this year.

“Unsurprisingly, if the tax costs for employment go up, employers are keener to find ways to mitigate them. The chancellor clearly believes this is what is happening,” said Matt Ellis, employment tax partner at Deloitte, speaking yesterday.