Reported plan to curb contracting 'unhelpful speculation'

Two national newspapers which helped lead the ‘witch hunt’ against PSCs in 2012 now claim that ministers want to ban most limited companies from contracting for more than a month.

Up to £400m will be raised by the ‘one-month-then-payroll’ clause which may be unveiled before Autumn Statement 2015, a ‘government source’ apparently told The Guardian.  

It would affect 90% of PSCs – the equivalent of 100,000 people, The Daily Mail claimed the following day, on Friday, in a piece also based on a ‘government source.’

The Mail’s piece differs from the Guardian’s on only the timeline (which neither quoted source chose to mention) by saying the clause “could be” unveiled on November 25th.

Both the pieces describe how the clause will have exemptions, notably, according to the Mail, for ‘contractors who use agencies to find work with a range of IT firms.’

The pieces also agree that end-users, who must bring PSCs onto the payroll after a month, will be held responsible, but agents would if they provide the PSCs, The Guardian claimed.  

Since the reportage, being described as a “jumbled mess,” ContractorUK sought the Autumn Statement (AS) predictions of a PSC advisory recently seconded to the government.

But the advisory’s boss declined to add to “more unhelpful speculation for contractors” as “I can’t see the point of speculating until we get the AS, and there’s not long to wait now.”

Yet if the reported clause is unveiled on or before Nov 25, it will be a blow to David Morris MP, the one-man bands tsar, as just last month he was “doing some work on IR35”.

In an article for his local paper In The Bay, the ex-businessman said he’d had an initial meeting with a Treasury minister about “working on a new tax system” for people affected by the legislation.

The clause outlined by the Mail and Guardian would, if accurate and if introduced, also raise questions about the need to legislate to ban tax relief on travel and food expenses for PSCs.

Ministers may also ask why there has been a consultation to largely restrict the relief PSCs can claim if PSCs will generally neither make claims nor even operate beyond 30 days.