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?