The REC have further discussed the impact of the government’s proposals into the taxation of ‘controlling persons’, which will come into force next year. The proposed legislation will see certain ‘off payroll’ workers closely investigated to ensure they are meeting income tax and NIC obligations.
The IMA and REC have previously discussed the effect that the government’s plans would have on the interim sector, and have again expressed some of their concerns through a statement on the REC website.
REC’s Solicitor and Commercial Advisor, Lorraine Laryea, described how the consultation and resulting legislation could “threaten the use of contractors and interims” adding that the REC and IMA have “argued against any knee-jerk regulatory response and underlined the crucial benefit to employers of being able to quickly deploy highly skilled executives on short-term contracts.”
There was a further comment from Les Berridge, of the REC Technology’s executive committee, who said the upcoming legislation is already beginning to worry some public sector contractors, adding; “There appears to be a perception that contractors and other non-PAYE workers are doing something wrong and are a PR risk which is complete nonsense.”
The REC said that their members have confirmed some public bodies are already starting to review their use of contractors, as well as implementing contractual measures which will affect contractors going forwards. They said there is a lack of consistency between departments and so have called for clear guidance relating to the legislation.
Mr Berridge also made the point that public sector contractors are affected by the issues related to the new IR35 rules, saying; “The real problem is the recently issued guidelines on IR35 which did not take on board our proposed weighting system. This was a missed opportunity for giving contractors clarity on their IR35 status and helping HMRC know which cases to investigate.”
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.