In this year’s Budget the government announced that it will reform the intermediaries' legislation (known as IR35) for public sector engagements because it believes that HMRC is losing up to £400m in tax a year from 20,000 contractors who work in the public sector.

It plans to do this by moving the onus on evaluating the workers IR35 tax status from the worker’s own company to the public sector body or agency/third party paying the company, who will then be liable for collecting taxes using real time information (RTI).