Contractors' group asks - is this the end of IR35?

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Contractors' group asks - is this the end of IR35?

Posted Jun 23, 2010

PCG, the contractors' group, says that it welcomes "the clearest statement yet from the Coalition Government that IR35 is to be abolished."

In an article for the Telegraph this morning Richard Tyler has interviewed Mark Prisk and it reads:

"Individuals selling their services through small companies have their taxable income policed by the so-called IR35 legislation.

This will now be abolished, small business minister Mark Prisk said.

"We want to make sure that we could undertake a comprehensive review of small business taxation in a way that makes the need for the current IR35 legislation redundant.

"But we want to make sure whatever we change is a lasting settlement. One of the problems with IR35 is that it's a constantly changing set of rules."

This follows several other powerful organisations coming out in agreement with PCG and saying that the writing is on the wall for IR35.

Francesca Lagerberg Head of Taxation at Grant Thornton said:

"The review of small business taxation has taken seven years and the hoped for abolition of IR35 looks very much on the cards"

The Federation of Small Businesses (FSB) in their Budget letter to the Chancellor called for:

"Removal of IR35 legislation to clear the route to entrepreneurship."

The Institute of Charted Accountants for England and Wales (ICAEW) IT Faculty in a tweet today commented:

"IR35 could be cancelled in a review of taxes for SMEs."

Chris Bryce, Chairman of PCG, said:

"Our talks with both Parties in the Coalition when they were in Opposition gave us the confidence that if they were in Government they would tackle the problem of IR35. Today I am delighted to say there is now real momentum behind the abolition of IR35. We are delighted that Mark Prisk has said publicaly what he has said to us privately and we are very pleased that important organisations like Grant Thornton, FSB and other leading bodies now take the same view as us. There is still much work to be done but we hope we can work with the Government and these other organisations to find a fair and acceptable settlement for all freelancers and contractors."

Contracting industry's reaction to the IR35 review

We will continue to update Contract Eye with expert views from within the industry over the coalition's pledge to review IR35 - a statement which has led to a variety of different views on not only how this will be achieved, but also when it will take place, and what (if anything) it will be replaced with.

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