IR35 review to report on March 10

The government-backed review of IR35 including simplification measures for contractors – the legislation’s fiercest critics, is expected to report on March 10th, Contractor UK has learnt.

Speaking yesterday, the Office of Tax Simplification revealed the date to CUK in a two-fold statement on why its seminal report on IR35 cannot wait until the Budget, on March 23rd.

“Firstly, we have always been clear that we will publish findings to inform the Budget, so by publishing the interim report in advance we are updating the chancellor of our direction. 

“There is also the fact that we are independent from Treasury,” the OTS continued. “So we would not publish [our] report [on IR35] at the same time as the Treasury's big event.”  

This Thursday, which would give George Osborne about two weeks to digest the office’s ideas on IR35 reform, is therefore the likely day, added OTS spokesman Andrew Bennett.

He said that, since the office’s first set of recommendations on tax reliefs were released yesterday, “our attention will be turning to the small business review from here onwards.”

With IR35 at its heart, the state commissioned that review in July, asking the OTS to come up with “alternate legislative approaches” that are simpler than the rule, but still protective of tax revenues. 

Now, the office’s mere admission that it wants to avoid overshadowing the Budget indicates that a simpler IR35-style framework has indeed been found, although it will face consultation first.

Firming up the prospect that the ‘son of IR35’ is about to rear its head, OTS staff and external secondees scrutinising the law spent much of last week “flat out drafting,”  often late into the night.

However, seemingly at odds with the source, the office’s latest board minutes state that its “conclusions” in the review of small business taxation should be made “without going into a great level of detail at this stage.”

Turning to IR35 specifically, the OTS said it had looked “in detail” at possible models for reform, mostly based on ideas which contractors and other affected parties put forward at its series of ad hoc road-shows .

Friday 4th March 2011