The governments consultation over proposals to tax ‘controlling persons’ at source has attracted a lot of reaction from groups representing contractors and freelancers. After the PCG scrutinised the plans earlier the week, the Freelancer and Contractor Services Association have added their thoughts.
The consultation is due to run for another week, to the 16th August, and HMRC believe that it will help ensure that those who “are in a position to control the major activities of an organisation” will meet their tax obligations, with income tax and NICs deducted at source, as with regular employees.
FCSA Chairman Stuart Davis was hard hitting in his response to the proposals, saying; “Frankly these proposals are an insult to contractors and freelancers. Just because they are ‘off payroll’ that does not mean that they are any less committed to the success of the organisation as the ‘on payroll’ workforce.”
“These proposals will also likely result in some organisations refusing to engage with self employed individuals which is contrary to the Government’s stated aim to help small businesses and will damage the UK’s flexible workforce which is critical to helping us get out of our current financial mess.”
The FCSA suggested that with legislation such as IR35 already in place there is no end for further regulations such as these, adding that it will only create extra complexity and confusion. They added that if it is to go ahead and be implemented then the definition should be narrowed to only include public sector clients being paid more than £150,000 a year, and on a project of less than 12 months; thus excluding the thousands of legitimate self employed workers and contractors.
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.