REC Raise Concerns Over Contractor Taxation Rules

Following yesterdays revelations from the PCG about the government’s latest proposals for public sector contractors, the REC have raised further concerns to the treasury about a number of other related taxation issues.

Tom Hadley, the REC’s Director of Policy and Professional Service, said that there is an urgent need for clarity and consistency for taxation rules within the recruitment sector, as well as for personal taxation rules that affect flexible staff and working patterns.

He said it was crucial for HMRC to make a “step-change” in its enforcement activities and confirmed that the REC is continuing to engage with HMRC to improve the implementation of IR35 rules for self employed contractors. In regards to the proposals for moving all controlling persons onto payroll, Mr Hadley said it was a major concern and one that would “undermine our economy’s valuable labour market flexibility.”

Mr Hadley added that the REC’s priority is “to work constructively with HMRC to ensure a fair and consistent market for jobs and business and to protect crucial flexibility within our labour market.”

These thoughts come following what the PCG described as “draconian measures” in dealing with some of the country’s most talented contractors and freelancers. The Government proposals would see all highly paid contractors in the public sector restricted by IR35 legislation, effectively eliminate them from working this way.

Mr Hadley concluded saying, “Our message to government is that the key to successfully using contractors and interims lies in sound management of contracts and staff, rather than restrictive, one-size-fits-all regulation.”

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.