The PCG has recently stepped in to the controversy over Ed Lester, the Chief Executive of the Students Loan Company, and highlighted the vexed issue of HMRC’s policing of IR35 and limited companies in the process.
Lester had been quietly channelling his lucrative pay and benefits through the limited company he had set up, saving an estimated £26,000 a year in unpaid national insurance contributions and income tax, all of which was approved by Lord O’Donnell, who was head of the civil service and treasury secretary when Lester was appointed.
The issue has left a bitter taste in the mouths of many limited company contractors, who continue to live under the IR35 sword of Damocles, fearing accusations of disguised employment by HMRC at any moment under the ambiguous legislation. Thankfully, PAYE umbrella contractors are spared this chronic anxiety, but IR35 remains a contentious issue for many in the freelancing and contracting community.
PCG Chairman Chris Bryce has now commented on the Lester affair. He states:
“The case of Ed Lester is sure to raise claims of hypocrisy and accusations of double standards. On one hand it appears HMRC and senior politicians have been prepared to rubber stamp Mr Lester’s deal, while with the other they are spending taxpayers’ millions pursuing genuine freelance workers.
“Since the inception of the badly thought out IR35 tax we have been calling on government to introduce clear and unequivocal guidelines for freelancers that are fair and equitable.”
He added that the Conservative Party had “performed a rather inelegant U-turn” on their earlier wish to abolish IR35. Perhaps, he continued, “the Lester case will make HMRC and government think again.”