Government department’s IR35 checks step up a gear

According to claims by contractor accountants Orange and Gold, one of its clients has reportedly received a letter from their employer – a government quango – asking that they either produce their payslips or clear off.

But not quite in those words.

The payslips are required as evidence to the quango that the contractor has been paying national insurance and is working within IR35. The concern is that limited company or personal service company contracting allows for tax abuse, and in some cases the right levels of contribution aren’t being made.

It seems that the results of the review of tax arrangements of public sector appointees are coming into effect early. It was thought that more factors would be involved, however, such as the contractor’s working practices and physical contract, but these letters imply that it’s actually only the payslips that will count in determining whether IR35 has been applied.

With the government being the largest user of contractor labour, it’ll be interesting to see how this pans out.

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