Network Rail

Network rail have revealed that they have assessed 99% of their contractors as being ‘inside IR35’. This means that these workers are caught by the off-payroll rules and will now have to pay tax like employees. 

They disclosed that only 7 of the 817 contractors who were assessed over the course of the year were declared outside of IR35, while 810 were inside IR35.The information has become available following an FOI request by Contract Calculator.Alarm bells must surely be ringing as to how they arrived at such a high figure. However, Network rail are believed to have admitted that roles were grouped together, and blanket assessed. HMRC said it had seen no evidence of blanket IR35 determinations in the public sector? Another contributing factor for the extremely low number 8% inside IR35 has been the reliance on CEST. As we hear more and more CEST has been continually exposed as inaccurate and biased. Yet Network Rail admits that it has decided to use HMRC’s tool ‘in all cases without exception’, and that ‘the result arising from this would be final with no appeal’.

Network Rail rely on flexible specialist contractors in order to run Britain’s rail network. However, this assessment could now force these skilled specialist contractors to leave.

Surely the impact of the off-payroll rules on the Public Sector are a warning particularly looking at the statistics for Network Rail, when HMRC estimate only around a third of individuals working through their own company fall within the rules and should be taxed as employees? Yet the Government continue to implant these rules on the private sector from April 2020