Despite unveiling research reported by the Public Accounts Committee (PAC) earlier this month that implied that 90% temporary workers in the public sector are tax compliant, the Freelancer & Contractor Services Association (FCSA) is disappointed to read in the consultation paper just out that HMRC is focusing on how to implement the public sector legislation rather than whether it should be implemented at all.
The planned new rules will apply to all businesses that supply workers to the public sector and means that the public sector hirer will delegate their new responsibility to consider whether the contractor is inside or outside IR35 rules if the worker is supplied via an intermediary.
Julia Kermode, CEO of FCSA, whose members provide professional support services to freelancers and contractors said: “The Government seems intent on forcing the entire workforce to be employed which is an incredibly outdated stance and a real concern given the UK’s reliance on the flexible workforce to support the UK economy. The consultation makes it very clear that employment rights will be outside the scope which means that an individual will be paying tax as an employee but will not automatically have the corresponding statutory employment rights. This is unfair, unethical and fundamentally wrong.
“The implications of the proposed changes will be significant – the new legislation could see contractors falsely put on the payroll and taxed at a higher rate when they shouldn’t be, or worse, that freelancers will be discriminated against as hirers choose alternatives to fulfil their staffing needs. It is a no win situation in an already stretched public sector that relies on temporary workers.
“Government and policymakers frequently wax lyrical about the value of the flexible workforce, but this is not demonstrated by their actions. We will be engaging in the consultation over the coming 12 weeks and hope we can get them to see reason.”