The Curajus State in action!

Jolyon Maugham QC, a leading tax barrister, expressed alarm at the consequences of the changes: “I was told by a very senior Treasury source that the government wouldn’t have got the proposals across the floor of the house if they introduced them for the private sector too. This change is going to have the effect of driving up costs in the public sector.

“The area where this is going to have the starkest effect is the NHS. Many doctors and nurses are going to seek to work more in the private sector and that’s going to create a problem in the NHS, which as we know is already struggling to fill positions.”

Ooooh, it’s got Soapy Joe upset. Must be good, eh?

Alex Cobham of the Tax Justice Network said: “This looks like the worst kind of populism by government. It has been badly done and badly targeted. It is not likely to make the tax system fairer and may have adverse consequences. It seems misguided and it is difficult not to think it’s politically motivated.”

And Alex Cobham? Must be truly great.

The IR35 tax system, introduced in 1999, is to be changed to require public sector employers to subtract tax and national insurance contributions from agency workers’ pay packets at source rather than allowing these workers to calculate their own tax contributions.

The government says it has introduced these changes because it estimates that 90% of these agency workers are not paying enough tax, leading to a loss of £400m a year to the Treasury.

Won’t Spud be happy! Cracking down upon tax abuse!

And isn’t it fun when they find out where the incidence of national insurance is, upon the workers?

27 comments on “The Curajus State in action!

  1. Not surprised about this move, we had to jump through hoops to demonstrate that we were IR35 compliant when I worked for DCMS.

    All that will happen is that rates will increase to cover the losses so Government departments will still lose.

  2. The worst tax offenders are non natives entitled to work in the uk. They pocket the gross and go home when the revenue comes calling. It was South Africans and Aussies in IT.

  3. I trust that the new laws will cover the Beeb. Then it won’t be able to report them because it will be an interested party. Oh yeah.

    Still, it won’t affect the Guardian even though some substantial proportion of its income comes from job adverts from the govt sector. Maybe the law should be extended to such companies.

  4. It’s going to be a car crash – HMRC hasn’t got their toolkit in place.

    And what’s the betting that at some point someone’s going to legally challenge along the lines of “I’m being taxed as an employee so I should get the rights of an employee – SSP/pensions/paid holidays etc”.

  5. Geoff, there are interims everywhere working in unfilled posts. They can apply for the jobs if they want, but the pay is usually terrible.

    If the option is employment, for roles that compete with the private sector, the best people will shift across.

    LAs in big cities will still be able to attract interims on lower pay but the calibre will drop. Will be a problem for your small rural district or even county council. I know places like Herefordshire, Cumbria and Lincolnshire struggle.

  6. The area where this is going to have the starkest effect is the NHS. Many doctors and nurses are going to seek to work more in the private sector and that’s going to create a problem in the NHS, which as we know is already struggling to fill positions.”

    How dare he? He’s suggesting that NHS workers are in it for the money. Falsehood. Nurses are angels, Doctors are heroes, and the NHS is the envy of the world.

    (I went out with an NHS nurse for a few years. She reckoned about half the nurses she worked with did bugger-all most of the time. Disclaimer: Anecdata.)

  7. It’s a bad idea because it would complicate the tax system further, but I often think that public sector wage slips should have different “PS” tax codes. Ones that shows their actual pay, and doesn’t pretend that they actually pay tax.

    So, for example, someone who’d get paid £20,000 and their normal tax code would mean they pay £3,000 tax, so £17,000 gets handed over. Instead give them a PS code and £17,000, with no pretence of any tax paid.

    I know there’s lots of holes in the idea, but it annoys me that a) they think they contribute tax; and b) you get nonsense about the government complaining it can’t afford “tax” payments to itself.

  8. @Cynic

    Your anecdata won’t surprise anyone who’s visited a hospital. Most wards will have a group of nurses drinking coffee and discussing their boyfriends or last night’s telly. To be sure, you can find much the same thing at many large private enterprises, but there’s more incentive (and therefore more likelihood) that something will get done about them. In the public sector you can go from first job to retirement without ever breaking a sweat.

    Disclaimer: there are, of course, many hard-working and dedicated individuals in the public sector. They have to pick up the slack for all the time servers, and they’re mostly quite annoyed about it (when they have the time).

  9. “I went out with an NHS nurse for a few years. She reckoned about half the nurses she worked with did bugger-all most of the time. Disclaimer: Anecdata.”

    My anecdata of observing the NHS in ‘action’ with my aged father rather confirms yours.

  10. There was a period when I visited patients in two different wards, in fact in two different local hospitals.

    In one case, I’d walk to the nursing station with a question and find the nurses idly gossiping. In the other I’d find them talking shop. From a distance you, or at least I, couldn’t distinguish the two.

  11. I was sat in A&E, waiting for my girlfriend about ten years ago. It’s not too busy, people sat around waiting, but not warzone stuff.

    (I’m too risk-averse to have needed A&E much. About the only dangerous things I’ve ever done are get married and use the showers at public school.)

    Some elderly bloke is sat there, shaking. The shakes are getting progressively worse. A doctor and a nurse are stood about a yard away, chatting. The doctor’s a bit of a dandy, so it looks like they’re flirting.

    Shakey suddenly shakes all the way off his seat and hits the floor.

    Dandy Doc looks at Shakey, then flees.

    Yep, he runs away.

    Now you’d assume that he was running for assistance. Although with him being a doctor, you’d kinda think him plus Nurse Flirty would cover it.

    Anyways, no further assistance arrives.

    Nurse Flirty helps Shakey back into his seat, gives him a blanket for his legs, tells him to sit there, then leaves him to shake a bit more.

    I left about an hour later when the GF got fed up of waiting to be seen. She’d been suffering something minor, like an inexplicable and sudden inability to breath properly. She’d been told she needed some medication but no-one bothered to bring it. You can only wait so long and ask so many times before you give up.

    I didn’t see anyone else come to sort Shakey out. I think he managed to remain seated, at least. Either that or I missed the other times he vibrated onto the floor.

    I’m hoping there’s a rational explanation for that night, but I dunno what it is. I’m guessing someone’ll know.

    (A few years later, I had an attack of temporary blindness. The NHS’s performance on that one proper put the frighteners on me, so I got private coverage shortly afterward.)

  12. Pretty simple Cynic, government cuts innit.

    My first thought on hearing of people stuck on trolleys for 24 hours without so much as a drink of water is that the NHS has an excess of utter bastards.

  13. Oh, now Jack, this was early 2007, during the Glorious Revolution and before the banks were handy scapegoats!

    Not during the awful austerity we’re dealing with now, where working class people have to eat each other, Eva von May and Herr Trumpler are mystifying the masses, Storm Trumpers are goose-stepping down streets, and stuff.

  14. Cynic…on another thread I was riffing on NHS employees with other sources of income. It had to do with corruption in Italy as I recall. SMFS said it was all to do with Italian mores but had nothing to contribute when people started to bring up UK situations. It would not surprise me if a lot of basic NHS admin staff were doubling up as school cleaners etc.

  15. “Even the Romans would say Naples isn’t quite Europe” was the thread.

    And go Soapy Jo. How’s the tax-payer funded windmill restoration going, Jo? he is the sort of QC that Cheri Blair would have worked for before she got into property chicanery with ministerial expenses

  16. “The area where this is going to have the starkest effect is the NHS. Many doctors and nurses are going to seek to work more in the private sector and that’s going to create a problem in the NHS, which as we know is already struggling to fill positions.”

    That’s total bollocks. There is no way that a doctor or nurse that is working solely for the NHS is going to be classified as anything but an employee under IR35.

  17. So dearieme in aggregate 50% weren’t working per Cynic, Chris and Jim? Meta-anec data beginning to show a pattern.

  18. The bit that leapt out was “they won’t be allowed to do their own taxes!!!”

    Oh no they can. I do agency work, my agency does my NI and Income Tax deductions, at the end of the year I “do my taxes” and get a refund for the overpayments. The only disbenefit is effectively being forced to put money in a savings scheme that pays out the next summer. And with savings interest rates at zero percent, I don’t see it as something that justifies my effort in doing anything about.

  19. Hmmm, I missed that, @jgh.

    Indeed. I’ve spent pretty much all my working life as an employee, with just a few goes at self-employment.

    I’ve written to HMRC about my taxes, even when an employee. Got some money back too.

    Hummmm.

    There’s a lot of what Van Patten described as unevidenced assertions (talking about the Murphster) floating around in journalism. I wonder how long that’s been going on.

    T’internet’s great: normal folks with proper jobs point out where journalists and “experts” are talking crap.

  20. Wilts,

    I dunno about the NHS but that govt project I worked on was quite instructive. One guy I worked closely with was a one man band limited company who only did govt contracts. How he evaded IR35 baffled me as I found it difficult to avoid and I was in a position to turn down work we we are not a one man band. And he wasn’t the only one.

    A lot of people contracted to the govt, national and local, really are employees in all but name as a scam to keep head count numbers down.

  21. Disclaimer: there are, of course, many hard-working and dedicated individuals in the public sector. They have to pick up the slack for all the time servers, and they’re mostly quite annoyed about it (when they have the time).

    Having worked for Her Majesty’s Inspectorate of Pollution and the Department of Agriculture and Rural Development (on Cow Passports) back in the 1990’s, I can confirm exactly this…there ARE some smart and bloody hard-working civil servants, but they are just inundated by having to carry the dead weight of the lazy and the feckless who surround them and outnumber them at least 8-to-1.

    There was always an ongoing bun-fight between the large IT infrastructure folks (IBM Consulting, EDS et al), but they all hated the scrappy little contractors who were able to come into juicy technical roles and massively undercut the big IT companies.

    It was lobbying by these big IT companies that created IR35 in the first place, so effectively forcing all the independent IT contractors out of government is a big win for them…less so for government projects currently ongoing, but there you have it.

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