Do you know how many civil servants are avoiding IR35?
Newspapers revealed recently that Ed Lester, the CEO of the Student Loans Company, a senior Civil Servant, was getting his salary of £182,000 paid through a limited company. This was to avoid paying some of the tax and National Insurance.
So, while HMRC were out hunting genuine contractors and spending years pursuing them and disrupting their lives, there in the very heart of the Civil Service was what they would call a ‘disguised employee‘.
Private Sector Bosses are Really Contractors
In the private sector there are many examples of top bosses being effectively contractors. There are those on 3 year rolling contracts and saving tax on their massive salaries. That’s whilst making sure that the maximum tax is extracted from their employees in their companies.
Now, it looks as if it has spread to the Public Sector.
One would bet that it is only at the higher levels that this sort of practice happens.
Public Sector Bosses IR35 Deals
One wonders, therefore, how many other bosses in the Public Sector have this kind of deal.
Also. one even wonders if there might be anyone high up in HMRC who is being paid this way.
‘It‘s the rich wot get the pleasure, it‘s the poor wot pay the tax‘.
Contractors Bad Name
These are, therefore, the kind of people who get contractors a bad name and for whom IR35 tax was introduced.
So, where will it spread next?
I‘m surprised Government Ministers haven‘t put themselves on three-year rolling contracts already.
So, with Danny Alexander now saying that it won‘t happen again, how will it affect genuine IT contractors working for the Government?
Will Government departments now be more cautious about taking IT Contractors on? That’s especially those that have been with them for more than two years?
Government cutbacks have already hit IT Contractors in the Public Sector.
So, let‘s hope that the capture of one civil servant who is a disguised employee doesn‘t heap more misery on genuine contractors.