Civil servants not happy about tax avoidance crackdown on ‘off payroll’ work

Exaro News has reported that civil servants are not happy with new ‘off payroll’ rules by the Treasury and may leave work in the UK’s public sector because of it.

According to the investigative website, civil servants are not happy with the government’s crackdown on tax avoidance through ‘off payroll’ work as they are finding new ‘assurance guidance’ rules from the Treasury ‘tougher than expected’.

Since revelations by Exaro News in February 2012 that chief executive of the Student Loans Company, Ed Lester, was avoiding large sums of income tax national insurance (NI) by working ‘off payroll’ and being paid his wages through a personal-service company, which he had set up himself, instead of the Paye-As-You-Earn (PAYE) system.Civil Servants not happy with new ‘off payroll’ rules

A UK Treasury review commissioned by chief secretary to the Treasury, Danny Alexander, also uncovered that some 2,400 civil servants were avoiding tax by working ‘off payroll’ and the BBC came under recent scrutiny for admitting to telling thousands of employees to work ‘off the books’ in order to reduce the corporations NI bill.

Exaro News have managed to get their hands on a copy of the ‘assurance guidance’, detailing new rules for civil servants earning over £220 a day who have been working ‘off payroll’ for over half a year.

New rules will require civil servants to prove that they are paying full income tax and national insurance contributions to the Treasury; otherwise they must go onto the payroll.

Adviser at PGC, the professional organisation for freelancers and contractors, George Anastasi, said:

“The ‘assurance guidance’ appears to be much firmer than many expected, restricting the allowable ways in which an individual can assure their engager that they are paying the correct amount of tax.”

New ‘assurance guidance’, which will rule what counts as ‘acceptable proof’ is expected to come into play on 15 September 2012.

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