High Level Contractors – Government to abolish them all

High Level Contractors
High Level Contractors

High Level Contractors

Are you one of the high level contractors that the Government wants to abolish?

A while back newspapers discovered that some of the Government‘s own high level civil servants were putting their income through limited companies.

Even in the very heart of IR35 territory, high level Government department managers were putting their income through Limited Companies.

Now, a Government review is suggesting that they will take a sledgehammer to crack a very small nut.

Controlling Persons

They are now saying that all ‘controlling persons‘ must legally be on the payroll of the company and not a contractor.

This just doesn‘t apply to Government Departments.

It also applies to companies in the private sector.

The Treasury said “this change in law will further tighten the rules ensuring that people paid through personal service companies in both the private and public sector pay the right amount of tax.’

We will have, therefore, a consultation process. It will go into law shortly after the next budget.

Project Managers

It looks as if it won‘t just be the very senior bosses who will come under this law. A ‘controlling person‘ could be argued to be a Project Manager or even a Project Leader. They also are ‘controlling persons‘ who manage other people.

They don’t appear to have defined a ‘Controlling Person‘ yet.

We all know what they see as ‘control‘ as far as IR35 is concerned.

Senior Civil Servants

Said Stuart Davis, Chairman of the FCSA:

‘It is one thing for the Government to choose to shut the door on senior civil servants working as contractors, but quite another to suggest that contractors engaged in senior positions in private companies and organizations should be shut out too’.

‘As we have made clear many times before, there is nothing wrong or inappropriate for any organisation, including the Government to engage contractors. That’s at any level, if done properly, for the right reasons and where those concerned pay appropriate taxes.

‘As the Chief Secretary said in his statement, IR35 exists to ensure that tax avoidance is not taking place. It is a gross insult to freelancers and contractors to suggest that just because they are not full time employees they are somehow abrogating their leadership responsibilities.’

The Chancellor is gunning for high level contractors.