Off-Payroll Arrangements in the Public Sector: Twelfth Report of Session 2012-13, Report, Together with Formal Minutes, Oral and Written Evidence
The Stationery Office, 2012 - Business & Economics - 49 pages
In May 2012 HM Treasury published its report on the use of off-payroll arrangements in central government ("Review of the tax arrangements of public sector appointees", Cm. 8350, ISBN 9780101835022). This showed that over 2,400 staff, each earning more than £58,200 a year, were being paid 'off-payroll' - a practice which generates suspicions of complicity in tax avoidance and which fails to meet the standards expected of public officials. The review's recommendations should go some way to reducing the prevalence of the practice, yet the scope of the review was limited in scope to central government and did not cover other public services, like Local Government, the NHS and the BBC. Some doubts about the Treasury's proposals remain. The Review stated that off-payroll arrangements can be used in 'exceptional circumstances' but does not clarify what these exceptional circumstances are. It also recommended that departments seek assurance that those staff who remain off-payroll are paying the appropriate amount of tax, but did not specify how departments could or should do this. Ultimately, whether those paid off-payroll are paying the right amount of tax is dependent on HM Revenue & Customs properly enforcing tax rules to ensure employees pay tax as employees. However, HM Revenue & Customs has progressively reduced its enforcement of the legislation designed to eliminate the avoidance of tax and National Insurance Contributions through the use of intermediaries, such as personal service companies, putting at risk any deterrent effect the rules might have on tax avoidance
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16 July 2012 HM Treasury accounting ofﬁcer agency amount of tax appointment Bacon BBC told Cabinet Office Carolyn Downs Chair Chief Executive Chris Heaton-Harris Committee David Smith deﬁned Department for Business Director EHRC employed Employment Business employment status end client engagement ensure ﬁgures ﬁnd Fiona Mactaggart ﬁrst ﬁve freelance contract Government Association HM Revenue HMRC Howard Orme income individuals Innovation and Skills interim intermediary Lin Homer Local Government Association look Matthew Hancock Meg Hillier national insurance contributions off-payroll arrangements Ofﬁce organisation paid through personal PAYE paying the right payment payroll Permanent Secretary personal service company personal service contracts programme Project Manager Report Revenue and Customs risk self-employed senior SERIES PRODUCER service company contracts signiﬁcant Sir Nicholas Macpherson Skills and Cabinet speciﬁc staff Stephen Barclay Student Loans Company tax and NICS tax arrangements tax avoidance tax-NICs Treasury Review William Hague worker Written evidence Zarin Patel