FCSA: ‘Controlling persons’ should earn over £150k or equivalent
10 August 2012
As the 16 August deadline approaches for consultation on government proposals to ensure that ‘controlling persons’ working for an organisation have PAYE income tax and National Insurance Contributions deducted at source, the Freelancer and Contractor Services Association (FCSA), argues that only those people earning the equivalent of a £150k annual salary should be defined as a ‘controlling person’.
Fri, 10 Aug 2012
As the 16 August deadline approaches for consultation on government proposals to ensure that ‘controlling persons’ working for an organisation have PAYE income tax and National Insurance Contributions deducted at source, the Freelancer and Contractor Services Association (FCSA), argues that only those people earning the equivalent of a £150k annual salary should be defined as a ‘controlling person’.
Explaining the thinking behind the proposals, HMRC says: “We believe that where people are in a position to control the major activities of an organisation the organisation, whether in the private or the public sector, should be able to have an assurance that the worker who is in a controlling position in the company is meeting their tax obligations.“The government’s intention is to ensure that where an organisation engages a controlling person, the engaging organisation will be required to deduct the income tax and NICs at source, as they would for their employees.”
The government has proposed that contracts under six months will not be included. And within the public sector, it proposes that the government department concerned has the right to “seek assurance” that an individual is meeting their tax/NIC contributions for all ‘off payroll’ engagements longer than six months, where the day rate is more than £220 a day.
However, The FCSA says that were the legislation to be implemented, then there should be a narrowing of its scope, so that it only includes public sector clients, on project-based assignments of less than 12 months, being paid the equivalent of £150k per annum.
On the 12 months figure, the FCSA is in agreement with Simon Drake, director of recruitment solutions for executive interims at Penna, as recruiter.co.uk previously reported.
Despite its approval of these potential compromises, the FCSA joins several voices including those in the interim management community voraciously opposing the proposals, with chairman Stuart Davis saying: “Frankly, these proposals are an insult to contractors and freelancers.”
As the 16 August deadline approaches for consultation on government proposals to ensure that ‘controlling persons’ working for an organisation have PAYE income tax and National Insurance Contributions deducted at source, the Freelancer and Contractor Services Association (FCSA), argues that only those people earning the equivalent of a £150k annual salary should be defined as a ‘controlling person’.
Explaining the thinking behind the proposals, HMRC says: “We believe that where people are in a position to control the major activities of an organisation the organisation, whether in the private or the public sector, should be able to have an assurance that the worker who is in a controlling position in the company is meeting their tax obligations.“The government’s intention is to ensure that where an organisation engages a controlling person, the engaging organisation will be required to deduct the income tax and NICs at source, as they would for their employees.”
The government has proposed that contracts under six months will not be included. And within the public sector, it proposes that the government department concerned has the right to “seek assurance” that an individual is meeting their tax/NIC contributions for all ‘off payroll’ engagements longer than six months, where the day rate is more than £220 a day.
However, The FCSA says that were the legislation to be implemented, then there should be a narrowing of its scope, so that it only includes public sector clients, on project-based assignments of less than 12 months, being paid the equivalent of £150k per annum.
On the 12 months figure, the FCSA is in agreement with Simon Drake, director of recruitment solutions for executive interims at Penna, as recruiter.co.uk previously reported.
Despite its approval of these potential compromises, the FCSA joins several voices including those in the interim management community voraciously opposing the proposals, with chairman Stuart Davis saying: “Frankly, these proposals are an insult to contractors and freelancers.”
