Conservatives would review IR35 rules following election win

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Conservatives would review IR35 rules following election win

Posted Mar 31, 2010

As part of their pledge to review small business taxation should they win the general election, the Tories have singled out reform of the IR35 rules as a priority.

The shadow business minister Mark Prisk said that his party would establish an Office of Tax Simplification as part of a fundamental review of small business taxation matters.

Writing on the Conservatives' site, Prisk said:

"For the last 13 years, Labour have constantly meddled with the tax rules for freelancers and self-employed. IR35 has especially proved to over-complex, uncertain and often unfair".

The new body would include a number of tax experts, with whom the PCG and other key business groups would work closely to simplify a tax system which has become overly complex and confusing over the past decade.

Chris Bryce, PCG chairman, made the following comment:

"This shows that the Conservative Party has been listening to and understanding the messages that PCG has given them. We believe this solution has the potential to lead to a fairer and more workable tax regime for the vast majority of those who work freelance..."

Encouraging signs, but early days

The Conservatives have had a long-term belief that simplification of the tax system was an essential task should they be returned to office, and IR35 has been on their radar for some time; in mid-2009, Mark Prisk told Contract Eye that the result of IR35 "has been to needlessly complicate freelancers' tax affairs and to introduce yet more red tape."

Today's statement is an encouraging sign that, after a decade of expense and uncertainty, the lifespan of IR35 may be limited after all, and should the Tories be elected, it seems unlikely that it would be replaced by something worse following a general review of business taxation.

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