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Where do the Conservatives stand on IR35?

Published on Jun 15, 2009 |

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The Labour Government invented the much-hated IR35, the Lib Dems recently heavily backed an Early Day Motion calling for the abolition of IR35, but where do the Tories ("champions of small business") stand on the legislation?

At Contract Eye, our understanding from various sources is that the Conservatives are examining a number of different options re. the IR35 rules. One option will be simply to scrap the unpopular rules and return to the pre-2001 tax arrangements.

Given the recent revelations that IR35 contributes a tiny £1.5m to the Treasury, a future Government would not be able to use 'revenue generation' as an excuse not to take action of some kind.

The other option would be to remove the specific IR35 rules as part of a general attempt to simplify the entire taxation system, as the amount of red tape and 'stealth' taxation has increased almost exponentially since Labour came to power in 1997.

Another contractor news site, Contractor UK, recently published a story which concurs with this view and suggests that the Tories are reluctant to commit to a simple 'repeal' of IR35 due to the complexities of the legislation. You can also read ITContractor.com's views on the subject.