Public Sector Problems With PSCs Shouldn’t Affect Private Sector

Contractors have had more than enough legislation changes to deal with in recent times so it’s good news for most that the Chartered Institute of Taxation (the CIOT) have come out and said that the UK government should be able to address the issue of high ranking public sector employees using “personal service companies” (PSCs) without bringing out any new legislation. This has been a big deal ever since revelations came out about Public Sector “employees” avoiding the employment route in favour of contracts based on the use of PSCs.

In response to the consultation paper issued on the matter, The Taxation of Controlling Persons, John Whiting, the CIOT’s tax policy director said that changes should only be made for public sector appointments and that the “for-profit” (private) sector should be left alone.

In his own words, “There seems to us to be little need to introduce new rules for the private sector”. “The consultation document does not identify a particular mischief that is occurring in the private sector that is not already addressed by the IR35 rules and the rules on agency workers.” He continued that the consultation paper does not make the case for intervention by way of a deduction of PAYE/NICs at source, “not least in view of the complexity that this would add for those individuals affected, end-users and HMRC”.

At long last contractors could have something to thank IR35 for!


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