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Sinner or scapegoat
KEY POINTS
- Are contractors responsible for a perceived tax shortfall?
- The new rules for public sector off-payroll working.
- The hirer will be liable to pay employer’s class 1 National Insurance contributions.
- A comparison of employer and worker liabilities.
- Will contractors pass on their National Insurance costs?
HMRC has long used contractors as scapegoats for its perceived tax shortfall portraying them as tax avoiders. However if a contractor is caught by the off-payroll tax which is new legislation inserted in ITEPA 2003 Pt 2 ch 10 (‘Off-payroll working in the public sector’) the hirer must pay employer’s class 1 National Insurance contributions on top of the income paid to each contractor. In other words this liability is calculated in the same way as it would be...
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