HMRC hire Friday-Monday contractor

[swamp]

Story in the Sunday Times page 4. You'll have to go out and buy it or have a sneaky read in the newsagents.

Basically HMRC hired their former CIO, Deepak Singh, for 50K a month paid to his personal service company. Mr Singh said it has not yet been decided how he would be taxed on his three months' work as a consultant.

[Zippy]

Story in the Sunday Times page 4. You'll have to go out and buy it or have a sneaky read in the newsagents.

Basically HMRC hired their former CIO, Deepak Singh, for 50K a month paid to his personal service company. Mr Singh said it has not yet been decided how he would be taxed on his three months' work as a consultant.

Damn! Didn't buy the Times today

[SupremeSpod]

Bloody hell, that's not exactly "Plenty Cheapness" - unless of course he's really bringing something into the business.

[Clippy]

Damn! Didn't buy the Times today

WZS.

ANyone got a subscription they can use to cut 'n' paste the article into this thread?

[Incognito]

Revenue pays former official £149k to do his old job
Robert Watts Sunday Times 25/07/10

BRITAIN’S tax authority paid a senior official nearly £50k a month after he had left his job because it could not find a replacement in time.

When Deepak Singh’s three *year contract as chief information officer at HM Revenue & Customs came to an end in June last year, he stayed in his post being paid as a contractor until September.

Singh, 46, was paid through his own private service company – a practice for which the Revenue has pursued others because it can help them to avoid paying income tax.

Before Singh became a contractor, his pay had been about £160k a year. Under the service company arrangement, the Revenue paid him almost as much as his annual salary to do the same job for three months.

Accounts filed by the Revenue last week read: "For the period June 19, 2009, to September 18, 2009, £149,500 was paid to Orwell Consulting for the services of Deepak Singh."

Singh said this weekend he had negotiated a daily fee with the Revenue when his three *year contract came to an end. "I said I wanted to become a contractor for personal reasons," he said. "I told them my daily rate and they were willing to pay it."

It is understood Singh’s fee is similar to the rates charged by senior IT experts hired out by KPMG, Deloitte and other consultancy firms.

Accountants have attacked the way the Revenue hired a consultant and paid him through a service company to do work that was to all intents and purposes a job. "This is precisely the type of arrangement HMRC itself has spent a lot of money trying to stamp out in the private sector," said a partner at a leading accountancy firm.

"The Revenue has hit people hard who are paid through service companies but who are effectively employees in all but name because it allows the employer to avoid National Insurance and the workers to pay less income tax."

By being paid through a service company, Singh could be liable to corporation tax of up to 28% rather than income tax at 40%.

Singh said it had not been decided how he would be taxed on his three-month consultancy as he would not have to file the relevant tax return until January 2011.

He said he would consult the Revenue and pay the tax that the department said should be paid on the earnings.

The Revenue said it would ensure no tax would be avoided as a result of the arrangement.

It said the size of the payments to Singh’s company reflected the fact that, as a contractor, he would not receive life insurance, pension contri*butions and holiday pay.

HTH

[thunderlizard]

Mr Singh said it has not yet been decided how he would be taxed on his three months' work as a consultant.

No, it hasn't. Apparently the rules are a tad unclear...

[bobspud]

I hate to bring you the bad news but I am willing to bet he will be 100% outside of IR35, as most direct government contracts are. There will be a clear schedule of requirements, and there will be a terms of reference to comply with once in post. He would have been told to provide his own tools, however to also comply with the site IT guidelines. Simples! it's only the likes of big business who blatantly couldn't give a toss about the consultants status where the lines blur...

$$ good luck to him

[Clippy]

HTH

Thanks.

[ChimpMaster]

This guy's singhing all the way to the bank!

[Zippy]

He's inside IR35. He was doing a job, then gets hired back as a contractor to do the same job?? If he's not inside, then neither is anyone else. The problem here is the word "intermediary" which just highlights how stupid the whole thing is.