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Watch out, offshore employment intermediaries – you’re next!

If you do contract work through an employment intermediary that resides offshore, watch out – the government is gearing up to target such agencies!

In its latest push to clean up instances of disguised employment, the government is ramping up efforts to keep IR35 compliance high. To further that goal its next target will be offshore employment intermediaries according to Danny Alexander, chief secretary to the Treasury.

Mr Alexander made the announcement that these offshore firms, which are often marketed as ways for permanent workers, freelancers and contractors to avoid a percentage of their tax liabilities, will be tackled to ensure that any unfair tax avoidance is stamped out. In order to accomplish this, a new consultation has just been launched and will be exploring proposals to rein in any activity the Government disapproves of.

So here’s some fair warning for you: if you’re currently using such an arrangement, there are new rules going into place that will see your NIC and income tax responsibilities being transferred to the firm that employs you through the intermediary. If it turns out that this ‘intermediary’ is just you holding up a fig-leaf over your face in a barely-successful attempt to conceal your identity, it gets even better: all those responsibilities will transfer right to you. Happy birthday!

I think this new change is most likely not going to have much of an impact on normal blokes just looking to make ends meet. No, it seems more as if it’s specifically geared towards catching anyone engaging in underhanded tactics in order to weasel out of paying their fair share, and for what it’s worth I’m glad the Government has decided to crack down on these bastards that think they can get away with murder.

However, this isn’t really going to net that much more tax revenue in the long run, is it? I mean yes it’s all well and good that we’re toughening IR35 rules in order to filter out those conceited contractors who think the tax law doesn’t apply to them just because they pull-down a six-figure annual salary, but aren’t there bigger problems facing the UK government in the form of huge multinational companies that don’t pay one red cent in taxes because of legal loopholes that they were actually initially encouraged to exploit?

It seems that the government is a bit pro-multinational by not pursuing these lost billions of revenue too rigorously. Instead, they decide to go siphon off as much cash as they can from sole traders in an effort to make up a shortfall that is massive and deep – much like the void between the ears of most government officials!

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