It seems that public sector IT contractors in the UK are starting to down tools across a range of projects ahead of the new tax regime in April, leaving numerous projects hanging in the balance.
Multiple sources have been in touch with The Register to report that professionals are leaving in droves rather than face the IR35 tax changes. From April the responsibility for compliance with the intermediaries legislation will be the responsibility of the public body or recruitment agency.
A survey by the site found that 90% of UK government IT contractors will rebel against proposals by HMRC to clamp down on self-employed workers not paying the correct employment taxes.
The government has responded to a petition asking to scrap the IR35 changes. It said it recognises concerns that determining whether or not the rules apply can be administratively demanding.
"In response to this, HMRC are developing an online tool that will help public sector bodies to determine whether or not the rules apply.”However, the live date for that tool won’t be until March, by which time many contractors are expected to have left the public sector!
Tax does have to be taxing.
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