Department for Work and Pensions: Staff

(asked on 20th February 2018) - View Source

Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what the (a) number and (b) average cost was of non-payroll staff working for her Department in each month in 2017.


Answered by
Kit Malthouse Portrait
Kit Malthouse
This question was answered on 23rd February 2018

The Department’s Tax Team has always undertaken assurance activities and checks on the employment status of our contractors to ensure that they are paying tax appropriately. A summary of these activities are reported in our annual accounts.

In 2017, HMRC implemented a change to off-payroll intermediaries legislation (IR35) which places the responsibility of determining employment status of contractors onto public bodies. In response, DWP have further enhanced their contractor hiring process and assurance activities to ensure that contractors have the correct employment status and are not operating as disguised employees. As an overview of our process:

  • DWP Tax and Commercial Specialists have developed comprehensive guidance to support making IR35 assessments, directly supporting business users in identifying the employment status of contractors.
  • Before a contractor is brought in, the civil servant that will be closest to the contractor completes the online HMRC Employment Status (ESS) tool, setting the working practices that will define the engagement.
  • The HMRC ESS online tool determines the engagement type as either in-scope or out-of-scope of intermediaries legislation. Where they are assessed as “in-scope”, the organisation paying the contractors fees is instructed to deduct tax and National Insurance contributions from the payment. The tool is endorsed by HMRC, utilising legislation and case law to classify contractor engagements.
  • In addition to the HMRC ESS tool, a DWP working practices assessment is completed which gives greater detail on the engagement. This further verifies the outcome of the HMRC tool and supports assurance activities.
  • Contractor roles are advertised as per the engagement status, so that contractors are brought in as either in-scope (required to be taxed through a payroll) or out-of-scope of the rules.
  • DWP Tax specialists undertake risk based assurance activities, undertaking detailed reviews to ensure that the Department is applying the rules correctly.
  • DWP Tax Specialists continue to engage with HMRC and the Tax Centre of Excellence to test the Department’s interpretation of the rules and ensure accurate classification of contractor engagements.
  • For new hires, contract extensions or whenever there are changes to working practices, a new IR35 assessment is undertaken to ensure that any changes are accurately reflected in the contractor’s engagement status.
  • The Government Internal Audit Agency has undertaken a review of DWP’s IR35 controls, finding that they are robust and provide good assurance that contractors are engaged with the correct status.

The majority of non payroll staff are employed to develop the technology for DWP major welfare reforms.

In the table below, please find numbers and average costs of contingent labour working in the Department during 2017:

Reporting Month

Number of Contingent Labour

Average weekly contingent labour cost (net of VAT)

Jan-17

465

£2,029

Feb-17

436

£2,606

Mar-17

393

£2,584

Apr-17

399

£2,334

May-17

404

£2,450

Jun-17

399

£2,376

Jul-17

399

£2,476

Aug-17

360

£2,510

Sep-17

375

£2,420

Oct-17

393

£2,746

Nov-17

410

£2,638

Dec-17

433

£2,682

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