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IR35 News

From April 6th 2017, IR35 status for Public Sector Contracting will be determined by the client, not the contractor.

For more information on these upcoming changes visit Public Sector Contracting. You can also have a look at what the contractors and industry experts are saying about it in our Public Sector IR35 Forum.

If you are unsure of your IR35 status you can get an IR35 contract review. You can also cover your tax and IR35 risks with IR35 insurance.

There is further IR35 information below.

The second session of the IR35 Judicial Review hearing took place today before Mr Justice Burton at the High Court, London.

The first session of the IR35 Judicial Review hearing took place today in Court 28 before Mr Justice Burton on the application of the Professional Contractors Group Ltd vs. Commissioners of Inland Revenue.

To understand the Judicial Review firstly, we need to look at the area of Public Law. Public law, is concerned with the relationship between 'us' as individuals and the State authorities. Public law is then sub-divided into: Constitutional law, which involves the study of the Parliament and the main institutions of government; Civil Liberties, which looks at issues such as human rights and the limiting of police powers; and Administrative law, which focuses on the legal aspects of the day-to-day administration by government and local authorities and how the individual can gain access to redress for a grievance they have against a public body.

The PCG has called on the Chancellor to use the opportunity of his Budget statement to announce the repeal of the IR35 legislation.

The Association of Technology Staffing Companies (ATSCo) has responded to complaints against Computer People for claiming that potential clients can avoid employment issues surrounding IR35 if they put an agent between themselves and any contractors.

Commenting on the news that the Tories would abolish IR35 if they won the next election, Vincent Cable MP (Twickenham) - Liberal Democrat Spokesman on Trade and Industry said:<br/>
"IR35 was a very serious blunder which has done much to damage the British IT industry."

The Tories have today announced that they will repeal IR35 if elected. Shadow Secretary of State for Trade and Industry, Rt Hon David Heathcoat-Amory MP said: <br/>
"IR35 was a sly measure which turned into a disastrous attack on the IT sector. In seeking to eliminate the bad it destroys so much that is good. The Government fails to understand that contracting out is a legitimate and growing practice in IT and other sectors... Labour have been deaf to the reasonable representations from the industry. By contrast we are taking positive steps to free people who are essential to the new economy from this repressive measure."

Those caught by IR35 must calculate their 'deemed payment', National Insurance and tax liabilities by April 19th 2001. For those unsure of their liabilities, the Revenue will accept provisional estimates providing that certain conditions have been met.

In a recent House of Commons debate (25/01), the Paymaster General still refused to acknowledge the existence of a 'brain drain' of IT specialists from the UK. She also denied that IR35 was aimed at the IT industry and implied that those caught by IR35 were not real 'entrepreneurs'!

The Professional Contractors Group (PCG) welcomed the news that computer company, FI Group, has caved in to pressure and withdrawn its offer of &pound;1,000 'reward' to employees to 'shop-a-contractor' who could be replaced by cheaper workers from the Indian sub-continent.

Business guru Sir John Harvey-Jones has agreed to become patron of the Professional Contractors Group, the representative body for independent contractors.

Over the past few months many individuals have written that they are not self-employed or disguised employees but that they are employees of their own company. However, this is not always the case. Article by Rebecca Seeley Harris.

We received a press release today from one of our visitors, which was also sent to the 'Hounslow Chronicle' (West London). It shows that it is very worthwhile writing to your local MP and 'shadow' MP's, informing them about IR35 (if necessary) and its impact on the contracting community.

Thanks to the 852 contractors who took part. According to the results, 15% have already left the UK as a result of IR35, with a further 29% considering making the move.

852 contractors took part in this IR35 survey, answering all or some of the questions.

The Professional Contractors Group called on the Prime Minister to scrap the so-called stealth tax IR35 which is putting tens of thousands of small entrepreneurial companies out of business.

The Paymaster General, Dawn Primarolo, has responded to Fran Littlewood's recent article in the Times which highlighted the confusion being caused by IR35.

In an open letter to the Prime Minister, the Professional Contractors Group has called on the Prime Minister to intervene and repeal IR35.

Last week the Tax Faculty published a taxpayer's manifesto for a better tax system. The Times followed up with a scathing attack on the state of the nation's tax affairs, including a reference to IR35.

The Paymaster General, Dawn Primarolo, has written a response to comments published by the Evening Standard's city editor, Anthony Hilton.

Rebecca Seeley Harris was in Court last week and has provided an excellent summary of the events which took place, and the legal issues involved.

Anthony Hilton, city editor of the Evening Standand passed strong comment on the consequences of IR35 in Friday's business section - 'When will IR35 damage dawn on Government?'

Following on from the PCG's victory in yesterdays' initial High Court Judicial Review hearing, the Inland Revenue have been very muted in their response to the decision. At this time, the only official response seems to be in the form of a new 'FAQ' on the Inland Revenue website.

The Inland Revenue has publicly answered critics at a meeting hosted jointly by the London Society of Chartered Accountants and the ICAEW's Tax Faculty.

The Professional Contractors Group called for 'joined-up Government in practice' when Home Office Minister Barbara Roche recognised there was an 'international scramble to attract IT experts' in a speech on immigration policy on the same day (September 11) that the Prime Minister published the e-envoy's report with a commitment to monitor the effects of IR35.

The Inland Revenue have uploaded Sarah Walker's response to a recent article - 'Alice In Primarololand', written by Robert Maas from the ICAEW Tax Faculty for 'Taxation' magazine.

In a newly released document entitled 'Keeping Britain Competitive', the Tories have again criticised IR35 and have pledged to review and reform the legislation if they gained power. The publication stops short of a firm promise to abolish the legislation at some time in the future.

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