Home Budget 2007 Company Profile Services Accountancy Zone Business Zone Tax Zone IR35 Update News Articles Feedback Search Legal Notice How To Find Us In an interview taped prior to Royal Assent to the Finance Act, Robert Maas, Tax partner of Blackstone Franks and Chairman of the Technical Committee of the ICAEW Tax Faculty, points out the need for personal service companies to have a 5 April year end, and warns that 31 March year ends are a "disaster". A 5 April year end ensures timely tax relief for any deemed payments under the new regime, whereas a 31 March year end prevents corporation tax relief being given in the year in which the deemed payment accrues. Maas recommends the payment of a regular salary throughout the year to mitigate the effects of any deemed payment. On the year-end calculation of the deemed payment, he criticises the lack of time allowed to properly compute the IR35 tax. The window of opportunity between 5 April and 19 April is far too short and puts "ridiculous pressure on accountants", he said. Prevention is better than cure, and Maas recommends avoiding Schedule E type work altogether where possible and instead taking Schedule D type work. A partnership structure is also a good way of avoiding the regime, so long as they are not husband and wife partnerships (or husband and common-law wife). Standard contracts are being much touted at the moment, and these are helpful in identifying the issues to be covered, but if they don't reflect the facts the Revenue will challenge them as a sham. One particular area of interest at the moment is the substitution clause. Maas warns that in many cases such a clause is "very unrealistic".