Controversial tax rule IR35 would be abolished if the Conservatives win
the general election.
According to the Tory election manifesto, getting rid of IR35 would cost
£100m. Labour has estimated the move would cost up to £1bn.
The legislation was introduced to stop people, usually in working in
information technology, from choosing to be contract workers to take a
number of tax advantages. But many IFAs working as part of networks or on a
commission-only basis could see the rules apply to them.
The Inland Revenue won a High Court battle against a challenge to the rule
from the Professional Contractors Group of mainly IT consultants but
campaigners against IR35 are threatening to take the case to the Court of
Training consultancy Taff Associates director Terry Foulkes says: “At the
moment, many IFAs are in danger of falling foul of the rules as the
relationship of an IFA with a network or of a registered individual with an
IFA could be seen as forming contract of employment. IR35 is a very real
attack on self employment and will snuff out new small businesses.
“I am surprised that its abolition would only cost £100m but that
would represent good value.”