IPSE Advice to Public Sector Contractors
Here is some IPSE Advice for contractors who work in the public sector. The Government and HMRC ar now attacking those contractors.
On September 15th, in response to recent scandal about Government departmental managers being paid through limited companies and the revelation that a third of BBC journalists were freelance, the Government is bringing in new rules governing the use of contractors in their departments.
Basically they are saying that if the contractors earn more than £220 a day and have been there six months or more they have to prove that they are outside IR35 or else pay IR35 tax or become an employee.
So, they refer to these contractors as ‘off-payroll engagees‘.
IPSE Advice to contractors
The Contractors Group, IPSE, has come up with some advice for those IT Contractors working in the public sector.
Contractors, therefore, have to prove to the department that they are paying the taxes and NICs that they should – as the Government see it.
So, they have four options:-
1. Operate IR35 voluntarily
2. Declare all income from the contract as salary
3. Make use of HMRC‘s confidential review service to show that IR35 doesn‘t apply
4. Provide other evidence that IR35 doesn‘t apply.
Public Sector Contractors
So, the PCG recommends that public sector contractors self-assess using the IR35 Business Entity Test that they helped HMRC produce. They should also get a reputable expert to review the contract. They will advise you, therefore, as to your IR35 status and steps you need to take to be at Low Risk of IR35.
This must be a very nerve wracking time for UK IT Contractors who work in the public sector..
That’s why they need this IPSE advice.
Those who work in the private sector, moreover, will be wondering how long it will be before the government extends this to the private sector.
We are in the crosshairs of the Government.