IT Contractors are now officially tax avoiders

Officially Tax Avoiders
Officially Tax Avoiders

Officially Tax Avoiders

It looks like contractors are now officially tax avoiders.

There has been a big hullabaloo recently about people like Jimmy Carr. He, and others, are paying very little tax as they have their money offshore.

Even the Prime Minister slated him.

However, as we know, whenever there is a hue and cry about these things it usually impacts IT Contractors.

That‘s how IR35 started.

Investigated by Public Accounts Committee

In yesterday‘s Times, it was announced that the loopholes that they have exposed will be investigated. That will be by the powerful House of Commons Public Accounts Committee.

It‘s Chairperson, Margaret Hodge said that these abuses would be investigated.

However, she went further than that.

She warned that ‘thousands of people employed in the public sector are still exploiting a loophole. This loophole allows them to lower their tax burden by receiving payment through a company‘.

She said ‘there are still people funded by the taxpayer working in local authorities and for the BBC who avoid paying tax this way’.

Using Limited Companies

She cannot mean the handful of very senior managers in Government departments and local authorities who have been using Limited Companies.

If it is in the thousands then it must be the contractors, including IT Contractors, who work there.

It always seems to be that they use any scandal to bash contractors.

Of course, if they make any legislation it is likely to affect not just those in the public sector. It will affect those IT Contractors in the private sector too.

IR35 and Disguised Employees

Remember that IR35 was brought in during 1999 to fix the problem of people being employees at a company on a Friday and then starting work as contractors at the same company doing the same job on the Monday.

The Chancellor has already used the scandal of those in senior positions in Government departments, including HMRC, using Limited Companies, to bash contractors by saying in the Budget that he would ‘strengthen IR35‘.

This latest scandal has nothing to do with IT Contractors. However, as we can see from Margaret Hodge‘s statement it is likely to be IT contractors who will bear the main brunt of any new legislation.

Big Boys Saving Money

Why don‘t they just go after the big boys at the big companies who are saving themselves and their companies billions?

Is that too much to ask?

Maybe contractors should, like Balatelli, wear T Shirts saying ‘Why Always Us?‘.

We are officially tax avoiders to them.