Anecdotal evidence shows the off-payroll working rules in the public sector are causing difficulties, according to the Chartered Institute of Taxation. In its response to the HMRC consultation on tackling non-compliance with IR35 in the private sector, the institute said many public sector bodies were automatically applying the IR35 rules to contractors working through their own personal service companies (PSCs) without assessing whether those rules should be applied on a person-by-person and contract-by-contract basis.

This situation was aggravated by doubts about the accuracy of HMRC’s check employment status for tax (CEST) tool. The institute noted that HMRC’s consultation …