Freelance contractors who operate within the public sector are to come under a much greater degree of scrutiny by the tax office in the future, according to the trade association group PCG. The PCG is claiming that it has been given access to leaked documents which reveal that a shake-up of the current government working system is set to take place soon.

Of most significance is the fact that the PCG believes that this might result in freelance contractors who are on a longer term agreement or working for a higher daily rate could end up being forced to do so within IR35 or face having their contracts brought to a forcible end.

A great amount of the project work carried out in the public sector is done by freelance workers in the IT contracting industry and there are fears that this draconian move could result in a huge gap in knowledge and in the IT skills market in the future.

“The harsh reality of this move will be to remove public sector access to freelance expertise and bluntly threatens to destabilise many government departments,” says the managing director of PCG, John Brazier. Mr Brazier goes on to add that it is of vital importance that the vibrant flexible workforce in the United Kingdom is not undermined by the country’s own government and notes that upon reading these proposals his reaction was to think of the expression “throwing the baby out with the bathwater”.

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