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Page last updated at 09:02 GMT, Friday, 5 October 2012 10:02 UK

Public sector 'getting away with it' on off-payroll arrangements

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A Public Accounts Committee report into off payroll employment practices concludes that too many public sector staff, including many at the BBC, have been paid using off-payroll arrangements for too long.

The report says that such practices for permanent employees generates suspicions of tax avoidance, places value for money at risk, and fails to meet the standards expected of public officials.

John Whiting, tax policy director at the Charted Institute of Taxation explained that the report is really targeting people in "disguise employment" - that's people who are "really an employee" but who are operating through a company as a freelancer.

The report points out that the anti-avoidance provision in place to tackle this, that's IR35, is "not easy to apply" and people have been "getting away with it".

Mr Whiting told the Today programme's presenter John Humphrys that freelancers working for the public sector should pay "similar amounts" of tax to employees in the public sector who pay National Insurance and PAYE.

He added that "simplification is needed" as well as a "general tightening up" of the current system.


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