Connect with us


Disguised employment crackdown – who will be caught?

Disguised employment crackdown - who will be caught?

From BBC and Channel 4 TV stars to language therapists and locum doctors – the crackdown on disguised employment across the public sector comes into force next month. Chris Blundell, Employment Tax Partner at MHA MacIntyre Hudson, outlines who will be caught:

“The boom in off-payroll work is costing the Exchequer an amount estimated in some quarters to be as high as £4bn a year and the Government is on a mission to tackle it. The public sector will soon need to think twice before engaging someone in this way.

“From 6 April, the public sector will be forced to assess workers engaged through limited companies to determine whether they should in fact be treated as employees and therefore taxed under Pay As You Earn (PAYE). This would lead to higher tax costs for the employer and employee, or the service company.

“The definition of public sector is broad and the measures may impact not only well-known stars at the BBC and Channel 4, support staff at schools, academies and universities, but also stretch to other areas of public life from local government, museums and the NHS.

“Organisations engaging someone via a personal service company will need to assess the consultant and may use HMRC’s new Employment Status Service Tool. If the worker is caught by the new rules, then their tax treatment should be as an employed worker with higher taxes.

“Determining whether someone is genuinely self-employed varies from role to role. For example, a BBC TV star employed directly by the corporation is deemed to be taxable as an employed worker for being under the ‘direction’, ‘supervision’ and ‘control’ of a producer. In contrast, a speaking engagement would be taxed as self-employment.

“While the headlines attract the big high-profile cases, there are likely to be many people on middle-to-lower incomes impacted by the changes and facing bigger tax bills. Supply teachers, therapists, IT specialists, sports coaches, locum doctors and many others working for public sector employers could have their incomes reduced as a result.

“This measure also puts the rest of industry potentially on notice. While the changes currently affect the public sector only, the private sector and charities might be next.”

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Recent Posts