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Contractors within HMRC

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Dear HM Revenue and Customs,

'During the timeframe of 2010 - present has HMRC and/or RCDTS engaged a Limited company or contractor/s directly (not via intermediary/umbrella company) that was involved with disguised remuneration?
If so, how many. Then please provide the start / end dates of contract (without naming person or Limited company involved).'

Yours faithfully,

JR

HM Revenue and Customs

Dear JR

Thank you for your email below.

As required by legislation, a valid Freedom of Information request must contain the following:
•Be in writing;
•Include the requester’s name and an address for correspondence; and,
•Describe the information being requested

Please can you re-submit your request and provide your full name.

Kind regards

HMRC Freedom of Information Team.

OFFICIAL

show quoted sections

Dear HM Revenue and Customs,

Updated details

Yours faithfully,

J Rice

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

Our ref: FOI2020/02537

Dear J Rice,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 6th November which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

1 Attachment

Dear J. Rice,

We are writing in response to your request for information, received 6
November.

Yours sincerely,

HMRC Freedom of Information Team

Dear [email address] on behalf of FOI Team,

With regards your question “ With regards to the engagement of a limited company, please can you clarify if you are referring to the contracting of an individual through their own personal service company”

The answer is yes

Yours sincerely,

J Rice

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

Our ref: FOI2020/02666

Dear J. Rice,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 12th November which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

1 Attachment

Dear J. Rice,

We are writing in response to your request for information, received 12
November.

Yours sincerely,

HMRC Freedom of Information Team

Dear [email address] on behalf of FOI Team,

Dear HMRC FOI Team,

Thank you for your reply to my FOI request (FOI2020/02666).

You have kindly confirmed that, following a search of records held, neither HMRC nor RCTDS (sic) have directly engaged any contingent labour workers or personal service companies. This response now prompts three questions in return, which I hope you will also be able to kindly answer.

1. On 10 November, you asked for clarification regarding the term 'limited companies' in my request, and on 12 November I confirmed that this was a reference to the contracting of an individual through their own PSC. As you have confirmed no limited company (PSC) contractors have been directly engaged by HMRC and/or RCDTS, please can you tell me, during the period 2010 to present, whether HMRC and/or RCDTS have directly engaged any limited company (i.e. not a PSC) which was making use of an Employee Benefit Trust (EBT)?

2. You have informed me that, during the period 2010 to present, no contingent labour workers or PSCs have been directly engaged by HMRC and/or RCDTS. This would presumably imply that all contractors working on HMRC and/or RCDTS' own systems have been engaged indirectly, following security clearance and other vetting checks (prima facie, on your behalf) by the agencies which are part of the Crown Commercial Services framework, or through a professional service provider. As HMRC and/or RCDTS will obviously have legal contracts in place with these agencies and professional service providers, please can you provide the numbers of contractors which they have supplied to you between 2010 and 2020, preferably with a summary total and a breakdown per year?

3. Based on the formal contracts in place between HMRC/RCDTS and the agencies who form part of the CCS framework, and also the contracts HMRC/RCDTS has with professional service providers, you affirm that any contractor who is engaged to work on HMRC/RCDTS sites and systems will have a contract in place with that agency or service provider, through whom each individual is, to quote from your reply, 'directly managed'. Please can you therefore confirm that, in all these instances, the definition of 'employer' is either the agency or the service provider, and not (apparently) HMRC/RCDTS as the 'client'?

Yours sincerely,

J Rice

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

Our ref: FOI2020/03257

Dear J Rice,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 4th December which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Team, HM Revenue and Customs

1 Attachment

Dear J Rice,

We are writing in response to your request for information, received 4
December.

Yours sincerely,

HMRC Freedom of Information Team

Dear HMRC FOI Team,

Thank you for your communication regarding my FOI request (FOI2020/03257) asking for clarification on the first question - "It is unclear from your first question if you are referring to the direct engagement of a limited company for the provision of contingent labour or referring to contracts for the provision of any type of service or goods".

I can confirm that this first question refers to the direct contractual engagement of limited companies (NOT PSCs) providing any type of service or goods - which, in this instance, can also include contingent labour. Hopefully questions two and three are self-explanatory.

Yours sincerely,

J R

FOI Team, HM Revenue and Customs

Our ref: FOI2021/01443

Dear J. Rice,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 15th February which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Depart ment for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

FOI Team, HM Revenue and Customs

1 Attachment

Dear J. Rice,

We are writing in response to your request for information, received 15
February.

Yours sincerely,

HMRC Freedom of Information Team

Dear HM Revenue and Customs,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of HM Revenue and Customs's handling of my FOI request 'Contractors within HMRC' and have laid out my reasons for doing so based on your replies to the three questions I asked, as follows:

Q1. I am uncertain as to why you feel it necessary to distinguish HMRC from the 'rest of government', as ALL contracts involving the sourcing of contractors and temporary workers for all public sector organisations are covered by the terms and conditions set out in the Public Sector Resourcing agreements - a service provided through Alexander Mann Solutions (who have a £15 billion, 6-year contract with the Cabinet Office/CCS - procurement reference RM3749), who are supported by over 300 specialist recruitment agencies classified by their role category capability.

What therefore constitutes 'HMRC's strengthened approach to tax compliance for its own procurements', when exactly the same rules are in place for all public authorities? It is evident from the relevant published documents on this subject that Alexander Mann Solutions, as the sole service provider, MUST ensure all workers engaged through the PSR model comply with ALL legislative and regulatory requirements, as detailed in the terms and conditions of the Framework Agreement, and are responsible for the provision of payroll services for all workers engaged via both non-agency supply routes and agency supply routes. They are also responsible for validating the accuracy of the information supplied by all workers, and all security vetting and compliance checks for each worker PRIOR to placement. With regard to contractors, departments and agencies MUST conduct REGULAR monitoring of the contractor’s COMPLIANCE with the contract. These mandatory security vetting and compliance checks, based on the requirements clearly laid out by HMRC in relation to 'compliance with tax legislation' contractual clauses, are a compulsory prerequisite for any worker to be allowed to be engaged to work for HMRC via the PSR rules.

The service provider (Alexander Mann Solutions) shall also, in consultation with the relevant parties under Clause 25.6.1, ensure that provisions dealing with tax liability, legislative requirements and Procurement Policy Notices are incorporated into the contract terms and approved through the Joint Governance Board PRIOR to the engagement by the service provider or any sub-contractor of any worker to deliver the worker services or any part of the worker services. This proves that the the contractual responsibility (and accountability) for the 'compliance with tax legislation' which you so regularly mention falls on the service provider, as clearly referenced in the aforementioned clause(s). The subsequent agreements which AMS have with their suppliers entitle them to withhold any payment due under this agreement any sum that it assumes may be (or may become) liable to pay in respect of income tax or national insurance relating to workers/contractors/consultants or workers supplied via the supplier, in relation to ANY relevant tax law.

In other FOI requests, HMRC has stated that 'the PSR call off contract provides the terms and conditions specific to tax compliance which are applicable to the entire supply chain for contingent labour'. You confirm within this latest response that 'HMRC reserve the right to exclude a supplier where HMRC can demonstrate a breach of tax or social security obligations by the supplier, including in instances where no binding judicial or administrative decision has been made. HMRC may exclude that supplier from the procurement until the supplier settles the tax due, or terminate its contract'. You reiterate that 'this approach is used for all procurements by HMRC, including contingent labour agencies and fully contracted-out services'.

Yet, as has been disclosed in other FOI requests on this precise matter, HMRC have confirmed that not a single contract with a supplier or agency, nor the service provider themselves, has been terminated as a result of the clear and obvious breach of their contractual agreement with HMRC by providing workers who are NOT compliant with the relevant tax law. When any perceived liability clearly lies outwith that of the 'worker' in the context of these PSR contracts, please explain why HMRC continue to utilise the services of all these suppliers when (as far as is currently known) none of these have, as per their contractual obligations, 'settled the tax due'?

The statutory instrument (Public Contracts Regulations 2015, specifically regulation 57) you reference lists an exclusion (amongst others) entitled 'Mandatory and discretionary exclusions for non-payment of taxes etc', which states:

(3) An economic operator shall be excluded from participation in a procurement procedure where -

(a) the contracting authority is aware that the economic operator is in breach of its obligations relating to the payment of taxes or social security contributions; and

(b) the breach has been established by a judicial or administrative decision having final and binding effect in accordance with the legal provisions of the country in which it is established or with those of any of the jurisdictions of the United Kingdom.

(4) Contracting authorities may exclude an economic operator from participation in a procurement procedure where the contracting authority can demonstrate by any appropriate means that the economic operator is in breach of its obligations relating to the payment of taxes or social security contributions.

This further reinforces the significance and importance of the previous question - why do HMRC continue to utilise the services of all these suppliers when (as far as is currently known) none of these have, as per their contractual obligations, 'settled the tax due'?

You also confirm that HMRC do not hold information about the utilisation of EBTs by departmental suppliers (in this case, limited companies) and explain that these types of trusts can be used for 'legitimate purposes' (such as 'providing benefits to a wide group of employees') as well as to 'facilitate tax avoidance schemes'. If you do not hold this information and have 'no need to record whether each of our suppliers has an EBT', then how exactly do you determine the legitimacy (or otherwise) of its use by the company in question?

Q2. Thank you for the link to the relevant information regarding the numbers of non-payroll staff (contingent labour and consultants/consultancy) which have been supplied to both HMRC and VOA since 2010. You clarify that this information does not contain the numbers of contractors provided through a professional service provision contract as this information is not held by HMRC. It would, however, be reasonable to presume that any contract which HMRC have had with a professional service provider since 2010 would be subject to, and include a requirement to supply (at least annual) reports on the numbers and types of staff providing that service. If HMRC do not hold (or are not provided with) this information, then who does hold it and how can it be procured for public scrutiny, given the fact that it is (exclusively) public money from the Exchequer which is funding this provision of service?

Q3. Thank you also for confirming that the contractual relationship between a worker and the supplier could be one of employer and employee - that is a very clear statement. You also suggest that 'other arrangements are also possible', but have neglected to describe or detail what those other arrangements might be and what would distinguish these from the former. Please could you therefore elaborate on your answer and provide a more detailed and comprehensive list of those 'other arrangements'?

You also state that 'HMRC does not have contracts directly with the workers provided by those suppliers and is not the employer of the workers'. My understanding is that it is not within HMRC's gift to determine the employment status of any individual worker, and that in the event of any dispute over a worker's status, that responsibility would fall to a judge in an appropriate court. Please could you confirm that is also your understanding in the context of any of these worker's contracts covered and governed by employment law(s)?

You comment that 'HMRC and RCDTS do engage workers via agencies and/or service providers and have contracts in place with those suppliers'. Those contracts, covered by Public Sector Resourcing agreements, as well as the 'Managing Public Money' framework published by HM Treasury and the assurances undertaken as part of the 'Procurement Policy Note – Tax Arrangements of Public Appointees' confirm that the responsibility and accountability for all workers' compliance with the relevant, prevailing tax legislation lies with the service provider and their agencies/suppliers. Thus, your claim that 'we are unable to confirm the nature of the relationship that exists between the suppliers and the workers themselves because HMRC is not a party to those contracts' is both inaccurate and misleading, as your OWN contracts with the provider, and by association those with the agencies/suppliers, give a clear indication as to their legal responsibilities (and liabilities) in relation to the payment of tax and National Insurance which HMRC (in this instance as tax authority) deem to be due. If you have evidence which you feel contradicts the relevant clauses published by government within these documents, then please provide it as part of this internal review.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/c...

Yours faithfully,
J R

FOI Team, HM Revenue and Customs

Our ref: IR2021/10119

Dear J. Rice,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 11th May which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answ er.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

FOI Team, HM Revenue and Customs

1 Attachment

Dear J. Rice,

We are writing in response to your request for information, received 11
May.

Yours sincerely,

HMRC Freedom of Information Team

We don't know whether the most recent response to this request contains information or not – if you are J R please sign in and let everyone know.