Taxing troubles

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The driver that delivered your goods this morning might, just possibly, have left you with another little present – namely his income tax bill.

The government is cracking down on the system of managed service companies (MSC) that are used by some self-employed drivers to avoid paying employed levels of tax and national insurance.

One of the less well publicised budget measures from Chancellor Gordon Brown means that from April, income received by workers in MSCs in relation to services provided through the MSC will be subject to employed levels of tax.

The government also plans to address the problem of MSCs escaping payment of tax and national insurance due by allowing the recovery of these debts from appropriate third parties which might even include customers.

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