HMRC TARGETS GSK CONTRACTORS WITH IR35 COMPLIANCE LETTERS
HM Revenue & Customs has written to around 1,500 contractors working for pharmaceuticals giant GlaxoSmithKline (GSK), advising them to check whether they are complaint with IR35 rules.
The letter asks contractors to use HMRC’s Check Employment Status for Tax tool to determine whether or not the nature of their working arrangement means they should be taxed in the same way as employees.
It reads: “Whether a worker is employed or self-employed for tax purposes is not a matter of choice. Instead, you need to look at the facts of the working relationship between you and GSK.
“This will help you decide if you would have been an employee of GSK had you worked for them directly and not through your personal service company (PSC).”
The off-payroll working rules, known as IR35, are being extended to the private and third sectors from 6 April 2020. This means that firms will have to check whether contractors need to pay income tax and national insurance contributions, shifting the responsibility for conducting such checks from the contractor to the organisation using their services.
A spokesperson for HMRC said that it was sending letters to contractors in sectors where there was a high risk of non-compliance with the IR35 rules, including the pharmaceuticals industry, but this did not necessarily mean that the individuals it had written to were breaching tax rules.
The spokesperson said: “HMRC works to ensure everyone pays the tax that is due under the law. Our compliance activity spans a variety of industries and is focused on specific areas based on our analysis of where current risks to the tax system lie.
“The off-payroll rules exist because it is fair that two people working in a similar way broadly pay the same tax and National Insurance, even if one of them chooses to work through their own company.
“We’re certainly not suggesting that all of the people we have written to have deliberately set out to pay less tax. The letters give them the opportunity to confirm they are following the off-payroll rules correctly.”
The GSK contractors’ letter says any person who believes their relationship with GSK qualifies as a genuine off-payroll working arrangement needs to provide HMRC with evidence to support their claim by 19 September. Should they find they should be taxed in the same way as a salaried employee, they need to work out how much they owe in National Insurance contributions and PAYE.
A GSK spokesperson said: “GSK is aware that some of our agency workers received communication from HMRC regarding IR35 tax rules.
“We acknowledge the important contribution these workers provide to the company. If individuals have concerns about this communication from HMRC, we would advise them to speak with their tax advisers.”
THE GOVERNMENT LAUNCHES £2 BILLION FUND CALLED KICKSTART SCHEME
The Kickstart Scheme provides funding to employers to create job placements for 16 to 24 year olds. The government has introduced a new Kickstart Scheme in Great Britain, a £2 billion fun ...
ROCKY ROAD AHEAD FOR VANS REDEFINED AS CARS
If modified crew-cab vehicles should now be treated as cars for benefit in kind purposes, what does this mean for input VAT and capital allowances? Helen Thornley investigates the wider tax implicatio ...
CLOCK IS TICKING TO REPAY CORONAVIRUS GRANTS
Self-employed individuals, and employers, have 90 days to inform HMRC that they have over-claimed the SEISS or CJRS grants and repay any excess before penalties apply. Any incorrect CJRS gr ...
TAX CREDITS DEADLINE: CUSTOMERS AT RISK OF LOSING OUT
Customers whose circumstances have changed in the last year or who have received a letter to reconfirm their income details must contact HMRC before 31 July. Tax credits customers only have until 31 J ...
OFF-PAYROLL APRIL 2021 PRIVATE SECTOR ROLLOUT NOW A CERTAINTY
David Chaplin of Contractor Calculator reported last night the following after the four-year loss against Off-Payroll Rules due to come in as of April 2021. David wrote; The April 2021 rollout of the ...
CITB AGREES TO CUT LEVY BILLS BY 25% FOR TWO YEARS
CITB has revealed plans to cut levy bills by 25% over the next two years and give cash-strapped contractors more time to pay. Employers will continue to have a payment holiday on the levy until S ...