UK Tories Promise to Review IR35

by Robert Lee, Tax-News.com, London

29 April 2010

Shadow Business Minister Mark Prisk has said that the Tories will conduct a review of small business taxation, in particular rule IR35 that affects small businesses and freelancers, should they win the forthcoming general election.

Writing to the Chairman of the Professional Contractors Group (PCG), the UK’s largest organization representing the interests of freelancers, the Tory Shadow Business Minister said that “…a Conservative government would undertake a fundamental review of small business taxation matters, including IR35”.

The Tories have said that a new Office of Tax Simplification will be set up if they win power and Prisk added in his letter that “…we recognise and value the contribution of freelancers and we are well aware of the way in which the current government has treated them. We want to deal with this problem comprehensively, in a way which provides us all with a lasting solution, not a short term fix.”

The Tory pledge follows persistent lobbying by the PCG to review the controversial IR35 rule.

According to statistics obtained from HM Revenue and Customs by the PCG last year, GBP9m in taxes was raised from contractors and freelancers caught out by rule IR35 in the 6-year period up to 2008. This compared to an estimated take of GPB900m when the rule was introduced in 1999.

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