IR35 ruling due next week

The judicial review of IR35, introduced by the Inland Revenue to prevent individuals from forming companies to avoid tax, ended...

The judicial review of IR35, introduced by the Inland Revenue to prevent individuals from forming companies to avoid tax, ended on Tuesday with a Government victory looking more likely.

Chris Mugan

Mr Justice Burton reserved judgement until next week, but indicated he was unconvinced by the arguments of Gerald Barling QC, representing the Professional Contractors Group (PCG), the organisation set up to lobby against IR35.

The PCG claimed IR35 was illegal under European law because it gave state aid to large consultancies against which individual contractors have to compete.

The Inland Revenue argued that even with IR35, tax laws were more favourable to contractors in the UK than elsewhere in Europe, with the exception of Ireland. "Not every company is as flexible as the UK," the Revenue's lawyer claimed.

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