Senior HMRC Managers
The Mail on Sunday has exposed two senior HMRC managers as being disguised employee contractors. They are using Personal Service Companies to receive their salaries. This is in order to defray taxes and NI costs.
Deepak Singh had been paid £160,000 a year as an employee. However, when he got the job of acting Chief Information Officer he became a contractor instantly on £150,000 a year.
Although he got paid less it was worth more to him as he was able to defray expenses. He could also pay Corporation Tax of 20% rather than income tax of up to 40% or 50%.
Therefore, it was a good deal seemingly all round. That’s except for the Treasury for whom HMRC are supposed to be maximising tax income.
It was the same with HMRC senior manager Jim Morrison who moved into the job of acting head of Human Resources in 2008 and started getting paid through a Limited Company rather than through PAYE.
So, the head of IT and the Head of Human Resources at HMRC were what HMRC would term disguised employees. That’s the very thing that IR35 was brought in to stop.
Genuine contractors don‘t go from a permie job on the Friday to a contract job on the Monday at the same company.
However, they caught tens of thousands of contractors in this IR35 net.
And HMRC have been out hunting them sometimes harassing them for years.
It‘s almost unbelievable that two of the chiefs at HMRC were actually disguised employees themselves. HMRC paid them weekly into their Limited Companies. That’s whilst HMRC were dragging legitimate contractors through the courts.
And there may be more.
HMRC refused to give out the numbers of their staff who are operating this way.
I hope IT Contractors who HMRC have pursued don‘t choke on their cornflakes as they read this.
There is one law for senior HMRC managers and one for contractors, it seems.