The group PCG has issued the attack after the Treasury announced its plans to tax senior public workers at source rather than allow them to operate through limited companies. The Treasury also said that Government Departments will be keeping a closer watch on the tax arrangements of the higher paid contractors. (See: Government clampdown on senior 'off payroll' workers - Shout99)
After years of believing it had the ear and support of the Conservative and LibDem Parties, this is the second time in as many weeks that the freelancer trade group has attacked Government plans after failing to achieve its objective of influencing Government policy for the benefit of freelancers.
The first occasion was the publication of the business tests, suggested by the PCG at the IR35 Forum, but the group was unhappy with the final outcome. Now, despite an advertising campaign to tell the Government not to target legitimate freelancers, the PCG has expressed its fears that the Government's latest plans could further damage the climate in which freelancers operate.
The Government's plans relating to senior workers on contract follows media exposure of a number of top Government workers, including Ed Lester, Chairman of the Sudent Loans Company, operating through limited companies in order to mitigate their tax. The number of 'should-be' civil serviants working 'off-payroll' was later put at more than 2,400.
The PCG said that it always been robust in its condemnation of 'disguised employment and tax evasion', but warned Government and public sector bosses: “Don’t look around to find people to blame in this Whitehall farce; look in the mirror and see the guilty people that have let the taxpayer down.”
The group claimed that the public sector 'has allowed and encouraged senior management to sit in high-ranking positions for over a decade while posing as ‘off-payroll’ contractors, casting a slur on the thousands of honest freelancers who offer both the public and private sector their flexibility and skills'.
John Brazier, MD of PCG said: “The danger of this debate is that we stigmatise honest freelance businesses and in doing so, allow those responsible to move forward without making the crucial changes required to ensure this does not happen again.
“PCG has always called for honesty and transparency and has worked with the Treasury to achieve clear and easy to follow guidelines for the use of freelancers. Many public sector Departments rely on them to provide specialist expertise when and where they are needed. They are paid a competitive rate but these freelancers are not provided with pensions, holiday pay, or redundancy rights. The tap can be turned on when their flow of expertise is needed and turned off when their skills are no longer needed, in the same way any supplier or partner would be used.
“The suggestion that freelance businesses that move from contract to contract are avoiding or worse, evading tax is insulting. It would seem to be a case of political expediency or civil service cynicism targeting these businesses when the true perpetrators in this offense against taxpayers can be found right in the middle of Whitehall.
“If the public sector Departments used these businesses correctly and wisely, freelancers would not be faced with a situation where they are forced out of a legitimate and mutually beneficial way of working through no fault of their own. PCG are now calling on the Government to take responsibility for the mess they have caused, stop blaming freelance businesses and take action to promote the proper use of this flexible solution within the public sector and beyond.”
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Susie Hughes © Shout99 2012