IT contracting experts have called on Chancellor George Osborne to use the upcoming Budget to “draw a line in the sand” with regards to the tricky issue of being paid as a personal service company, particularly in the public sector, rather than as an individual.
It is hoped that the Chancellor will use the opportunity presented by the Budget to clarify the current legitimacy of such tax-efficient structures, especially when they have been engaged by the state.
Kate Cottrell, an employment status expert, said: “From an IR35 perspective it is usual to ‘announce’ nothing much. But this year there may be something in the [Budget’s supporting] documents about addressing the recent personal service company issue in the public sector.”
It is believed that such has been the outcry over personal service company working that clarification from George Osborne should apply to and also help the private sector as well.
A spokesperson for IT contractors Brookson said: “We still see strong evidence that the key role of these workers remains unrecognised and unsupported by government. Much of the recent media coverage and political reaction to the ‘limited company working’ stories demonstrates this lack of understanding really starkly.”
It has been reasoned that Mr. Osborne now has “too much ammunition”’ to evidence a claim made by the Treasury that IR35 will need to be kept in place for its effect as acting as a deterrent, and it is hoped that on Budget day some positive progress can be announced from the current IR35 Forum activity with regards to how HMRC enforcement will be more efficiently and realistically carried out.