APSCo Fear Public Sector Contractor Exodus

The recent ‘off payroll’ taxation proposals is currently one of the most discussed topics amongst contractor and freelancer groups, as well as recruitment and taxation bodies. In the wake of some public criticism of the way the government handled their own use of contractors, they have responded with proposals which have been seen as controversial to many of these groups.

The proposals, which will see contractors on over £220 per day or with contracts over 6 months liable to pay income tax and NIC at source, have been questioned by the CIOT and called “insulting to contractors” by the FCSA.

Joining the debate now are the Association of Professional Staffing Companies (APSCo), who believe that the government need to take action before the public sector suffers from a loss of top contractors. They said that there is “understandably a great deal of concern and confusion surrounding this issue, and we feel that clarification is required from Government very soon to avoid large numbers of contractors choosing to move into the private sector.”

Much of the confusion seems to relate to how contractors are taxed on public sector contracts, however APSCo believe that workers will still have the opportunity to show they are legitimately contracting. They have suggested that contractors who are seen as medium or high risk on the new Business Entity Tests could be faced with an HMRC investigation, however they added that;

“We do not believe that HMRC has the resource or structure within its IR35 team to deal with that level of investigations. We also doubt very much whether Government is ‘joined up’ enough to actually facilitate that kind of cross departmental communication.”

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.