New Government Expected to Review IR35 Legislation

PCG, the tradebody representing freelancers and contractors, believe that the new government will review and remove the unfair aspects of the IR35 tax legislation.

John Brazier, MD said “both parties have expressed the need for change with regards to IR35, and both parties value the flexible, skilled workforce PCG members provide.”

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2 Responses to “New Government Expected to Review IR35 Legislation”

  1. john a gelmini says:

    Good Morning,
    IR35 was and is manifestly unfair and should have been abolished a long time ago.
    It is unfair because it seeks to treat small fledgeling business owners as if they were employees.
    If you are an employee you are provided with an infrastructure,business(unless you are in sales),company cars,expenses,a brand or at least market positioning to leverage from,an office,support,and if you are based at home,the resources to work from there.
    On top of this there are paid holidays,colleagues to talk to and usually some senior management guidance.
    All of this has a value which is worth 3 to 4 times the salary that the employee receivesyet the firm providing it can offset practically all of it against its corporation tax liabilities leaving the rest to be picked up by the employee through PAYE.
    In the world of IR35 the contractor is expected to provide all this infrastructure out of his/her own resources,find their own work,undertake their own training,provide their own benefits(almost always at worse terms than is possible with a larger firm with more purchasing power) and then pay taxes as if they were employees.
    Only a member of the Fabian Society and an enemy of free enterprise like Gordon Brown could have conceived such a disgraceful piece of legislation which simply encourages people to find loopholes or to become “Perpetual Travellers” with five flag strategies which allow them to avoid paying tax altogether.
    Sadly even David Cameron who is philosophically opposed to the sort of nonsense that IR35 represents-(which is the idea that the middle classes enjoy paying taxes and exist only so that Governments can extract taxes from them so that it can be wasted,in some cases stolen and if there is anything left-given to people that the taxpayer does not know or care about)cannot do very much.
    This is because as has happened in the past on at least three occasions in my lifetime the Labour party headed by the useless and incompetent Gordon Brown have run up a deficit of £2.2 trillion gbp which will take years of pain to repay.
    Sadly little will change leaving contractors with one option other than becoming or remaining a financial milch cow-which is to adopt the strategy of the ancient sages who learnt how to”move across the earth without form”,and the strategy of ensuring that” income “is minimised and expenses are maximised probably in another jurisdiction,after they have completely severed all ties with this country.

  2. by Editor says:

    Thanks John – that is a very lucid explanation.

    I also like the saying that IR35 is high stress, highly unfair and of little revenue value.

    A polite way of saying ‘stupid’?


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