Uncertainty Over Possibility Of IR35 Review Continues

by Robin Pilgrim, LawAndTax-News.com, London

02 July 2004

Despite a recent denial by the UK's Inland Revenue that it is planning to review the IR35 tax rule for professional contractors, ever-hopeful small business groups have suggested that a statement in the last Budget could leave the door open for the government to look again at the implications of the controversial legislation.

Speaking to Accountancy Age with regard to paragraph 5.95 of the Budget, which states that the government will "consider the strategic issues raised by the growth in small owner-managed businesses, as well as the changing nature of employment and contractual relationships", chairman of the Professional Contractors Group, Simon Juden suggested that the issue may be examined in this year's pre-budget report.

"This means that the government has implicitly recognised that measures such as section 660A and IR35 are causing problems. It is going to take a look at the whole sector and set up of these regulations which, in effect, prevent small businesses and freelancers from trading to their full effect," he argued.

Small businesses have also drawn heart from the survey currently being carried out by the All Party Parliamentary Small Business Group, which is looking at the effect that recent legislative changes such as IR35 have had on the sector.

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