Here’s an interesting article from the guys over at BrassTax:
We commented in February on the revelations about payments made to key executives by central and local government.
Newsnight now reports that more than 2000 public sector workers seem to avoiding Income Tax and National Insurance Contributions by being remunerated through companies. For the background and our general comments see our earlier piece.
But one important point seems to have been drowned out in all the kerfuffle and it’s this: in many cases the arrangements do not in fact “work” in the sense that they are already countered by existing legislation (the so-called “IR35 rules”). The question which needs to be asked is why HMRC has not challenged these arrangements?
There is absolutely no suspicion of a hint of a possibility of a shadow of the slightest doubt that HMRC would undoubtedly have leapt on arrangements of this kind if it came across them in the private sector. And that probably understates the certainty of a challenge. So either HMRC are knowingly failing to apply the same tax rules to central and local government as to the private sector: or they are simply asleep on the job.
We are not sure which is the more worrying analysis. But, to quote a well-known satirical magazine, “I think we should be told”.
Visit the BrassTax website at www.blktax.co.uk