A contradictory picture is emerging over the potential impact of the government’s ‘off-payroll’ rules on IT contracting in the public sector.
The Association of Professional Staffing Companies (APSCo) has received feedback from some of the IT recruiters in its membership suggesting that contractors specialising in the IT skills market are already abandoning the public sector, or choosing not to work through personal company solutions.
An APSCo spokesman said: “There is understandably a great deal of concern and confusion surrounding this issue. We feel that clarification is required from government very soon to avoid large numbers of contractors choosing to move into the private sector rather than, as they see it, being required to relinquish responsibility for deciding their own tax affairs.”
Clarification was also urgently required for contractors working through Umbrella Companies, the association added. While the government has so far given no indication as to how they will be treated, it is well understood that they are employees of the Umbrella, and therefore PAYE and NICs are deducted at source in a tax efficient manner and it is therefore highly likely that PAYE Umbrella Employees will not be affected by the “off-payroll rules” at all. What is not helpful is the continued lack of specific guidance.
Elsewhere, however, a very different picture is emerging. Don Tomlinson, MD of the IT recruitment firm Max20, which specialises in contractor roles in the NHS, says that demand for information management and technology (IM&T) contractors especially is “soaring”. What is clearly at issue is the channel that these professional chose to work in: freelance, self-employed, Personal Company, PAYE Umbrella or other. New Clinical Commissioning Groups and Health Informatics Services are making the commercialisation of the NHS more effective through IM&T, he said, and fuelling the demand for talented IT contractors in the process.
The NHS has grown more accustomed to hiring skilled contractors over the years, Mr Tomlinson added, and now offers competitive pay rates, cutting-edge projects and supportive environments. He believes that clear contractual arrangements between recruiters and freelance service providers should ensure that IT contractors would not be penalised by the new rules.