It looks like not every public sector contractor will have to live in fear of falling prey to an IR35 compliance investigation, it was recently revealed.
Earlier this month, it was revealed at an Association of Professional Staffing Companies meeting by a Treasury official that while all public sector departments include terms in their contracts that provide them the right to demand a contractor, freelancer, or umbrella company worker lies outside the scope of IR35, there is no expectation on the part of the Treasury that every hiring manager will call for these assurances in every situation where there is a worker off-payroll. The Treasury representative instead remarked that the most common occurrence will be hiring managers sampling a fraction of their contracted workers.
APSCo reported on the assurances given by the Treasury as it worked to dispel the perception among freelancers working public sector contracts that every single one of them would be subject to scrutiny under the disguised employment legislation. In fact, the industry body explicitly told its members that the Treasury neither expects or demands such occurrences, though there were no guidelines forthcoming on what percentage of public sector contractors would be subject to IR35 scrutiny.
This will spell massive relief for many nervous freelancers who have been worried that the Treasury will be investigating their contractual relationships with with public sector clients, as the Government has expressed a desire to crack down on disguised employment in an effort to regain tax revenue lost from lax IR35 enforcement.
