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Most recruiters believe that IR35 cannot stay in its current form
Posted Mar 7, 2011
The vast majority of recruiters believe that IR35 is ineffective and ripe for reform, according to a survey carried out by the Recruitment & Employment Confederation (REC).
An impressive 92% of recruiters who responded, in affected areas such as technology and engineering, said that the Intermediaries Legislation is not effective in its current form.
The lack of certainty caused by the IR35 rules appears to lie at the heart of the problem; the two most common complaints cited being a lack of certainty as to whether a contractor is inside or outside IR35, and also that the rules are open to interpretation.
Just 2.7% of recruiters thought that IR35 should continue in its current guise. Almost half thought that IR35 should be scrapped completely, and 38% think that the rules should be changed to provide greater certainty to contractors, agents and end clients.
Jeff Brook, REC Technology Chair, commented:
"IR35 has been an awkward, unsatisfactory attempt to tackle the problem of disguised employment ever since it was set up in 1999. These survey results make it plain that the recruitment industry would not accept anything less than a serious overhaul of the current system.
"Whilst many recruiters would be happiest to see IR35 simply removed from the statute book, there would also be support for a pragmatic attempt to clarify the rules. If contractors, employers and recruiters could be certain in advance whether they fall within IR35 or not, many of the current problems could be eliminated."
OTS IR35 Review
The Office of Tax Simplification (OTS) is due to publish its interim IR35 review report on Thursday 10th March. The REC was recently invited to sit on the OTS's small business consultative committee.
Keep up with developments in our IR35 review section.
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