Contractors' Questions: Will IR35 be in the Spending Review?

Contractor's Question: How is the government progressing with its review of the IR35 legislation, and will we receive word on the successor to IR35 in the Comprehensive Spending Review on Wednesday? I’m worried that there might be some truth in fears that the measures to replace IR35 may be more taxing than IR35 itself, or is the Office of Tax Simplification (OTS) aware of this concern?

Expert's Answer: The OTS was established to provide expert advice to the Chancellor on options to improve and simplify the UK's tax system.

We made it clear, from the outset, that we will be publishing the initial findings of our review on small business taxation, including IR35, by Budget 2011. This remains our plan.

Work on this review is underway, including a good deal of consultation with relevant groups. There was never any intention to input in any way into the Spending Review - which as far as I know will be all about spending matters.

I can't speculate on the possible conclusions of an ongoing review but do bear in mind that our aim is to produce recommendations around simplifying the tax system.

The expert was John Whiting, Tax Policy Director at the Office of Tax Simplification.

Oct 18, 2010