The House of Lords is preparing to look at the tax issues surrounding the use of Personal Service Companies (PSCs) today but this time it will take evidence from witnesses from both the private and the public sectors report Harris & Co accountants Northampton who frequently advise their small clients on the use of Personal Service Companies.
Michael Coughlin, executive director of the Local Government Association (LGA) and Gordon Fleck, policy manager at the Department of Health, will appear before the committee at 4pm today, and will likely face questions about which parts of local government and health services use PSCs, and whether this has increased or decreased in recent years.
Other issues they are set to be quizzed over include whether health services or local government are pushing people into working through a PSC because they do not want to create an employment relationship with their workers and whether there are any particular difficulties for local authorities or health services when staff are engaged through other intermediaries, such as agencies.
The committee has indicated it also wants to examine if HR, procurement and finance departments have sufficient knowledge of IR35, and if they provide workers being engaged through PSCs with assistance to help them understand the rules which make them responsible for the risk of IR35.
Public sector witnesses will be followed by Dr Alix Thom, employment and skills policy manager for Oil and Gas UK, and Robert Fort, tax director at Amey.
According to the committee, the private sector witnesses will be asked about whether there are any advantages in engaging workers using a PSC to deliver particular business needs; if IR35 creates confusion in the contractor market and the negative impact any such confusion may have; if people contracted through PSCs in their sectors understand their tax and National Insurance liabilities, their lack of employment rights and, if so, what benefits they gain from using a PSC; and what level of interest businesses take in establishing whether IR35 might apply to contracts