HMRC is requesting the personal details of public sector contractors continuing to work outside of IR35 through their limited companies, according to a letter leaked to ContractorCalculator.

The letter, which is being circulated to public sector bodies, asks that the recipients provide the HMRC with names and addresses of limited company contractors who are operating outside of IR35, as part of HMRC's compliance check for the Off-Payroll tax.

It also requests that public sector bodies provide precise details of each engagement of contingent labour, including: 'the names, addresses and a brief description of the worker role/nature of services provided by the Personal Service Companies'.

ContractorCalculator called the letter a ‘witch-hunt’.

"This appears to be another ominous sign that the Off-Payroll tax is nothing but a witch hunt against contractors," ContractorCalculator CEO, Dave Chaplin, said. “HMRC is evidently leaving no stone unturned in its pursuit of the few who have managed to secure fair tax treatment despite Off-Payroll."

The HMRC also seeks details of how public sector bodies are conducting their assessments, asking specifically whether CEST has been used. HMRC also asks that public sector bodies provide details of contractors who traded via a limited company previously, but have since entered into employment contracts or umbrella company engagements.

According to ContractorCalculator, this has prompted concern that the HMRC may pursue any named individuals for back taxes.

"Contractors who have followed best practice and created a paper trail to prove their outside IR35 status shouldn't have much to worry about," Chaplin said. “Although, given the approach that HMRC has adopted since Off-Payroll took effect, it likely won't prevent the taxman from sniffing around their affairs.

"HMRC is refusing to accept that its contrived rules are forcing contractors into 'inside IR35' arrangements, and seems intent on interpreting instances where contractors have been forced to work under umbrellas as evidence of prior non-compliance with IR35," Chaplin said.

Last week, it was announced that Her Majesty’s Treasury is finalising plans to extend ‘Off-Payroll’ rules to the private sector as part of a crackdown on tax avoidance from private companies claiming self-employed status. Given the outreach to public sector employers to provide details of contractors working outside of IR35, private sector employers might expect that a similar obligation will be placed on them in the future.