HMRC has brought in a voluntary exit scheme for those people who have fixed term contracts. They currently have 3,900 on fixed term contracts and aim only to keep around a 1,000 HMRC Contractors. The rest of them will not be kept on after their contracts end in March.
1,500 are to go in Personal Taxes and a further 500 in Debt Management. Those under threat are those in Devon, Scotland, Northern Ireland and Wales.
HMRC have already cut 34,000 staff and plan 10,000 more by 2015. They said that the reasons for these fresh cuts are that people are now availing themselves of their online services more.
One area where they have not cut back is in the area of IR35 Compliance. Indeed they hired a team of 36 IR35 Compliance officers to hunt down contractors who they think are inside IR35 but operating as Limited Companies.
The unions are opposing these cuts. They said â€œWe have made it clear we oppose the decision not to extend these contracts beyond April 2014 or make the staff permanentâ€.
Contractor Accountants should be contacted by contractors who are worried.
They reckon that previous staff cuts have hit HMRC performance but HMRC saidÂ “These are fixed term contract staff whose contracts are coming to an end â€“ these employees never were permanent staff”.
It will extend the contracts of 1,000 HMRC contractors beyond March but wouldn’t say for how long.
They saidÂ â€œThe voluntary exits being offered to staff in 21 offices are as a result of one or more business areas concluding that these offices do not fit with their long-term plans, and that work that is currently being done in them is better placed in other officesâ€.
It’s very strange that contractors are going to be asked to voluntarily exit HMRC. One wonders what sort of status these contractors have there and whether they are Umbrella Company contractors or Limited Company contractors with Contractor Accountants.
What if some of the HMRC contractors don’t want to leave voluntarily? What then? Are they to be offered payoffs?
It’s a very strange situation.
As one knows, at a lot of places, the contractors, who have lots more experience, carry the permanent staff. Dumping most of their contractors may hit HMRC hard.