IR35 fight at risk from inexpert appeals

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IR35 fight at risk from inexpert appeals

Bruce Ackland
IT professionals who appeal against IR35 without proper legal representation risk damaging the fight against the controversial tax measure, according to the Professional Contractors Group.

The PCG, which has 14,000 members, spoke out after an anonymous IT contractor who represented himself lost an appeal against the Inland Revenue last week.

"We are desperate for well prepared appeals against IR35 which will push the boundaries of IR35 and clarify the situation. This does not help at all," the PCG's Susie Hughes told CW360.com.

The IT professional at the centre of last week's case worked through his own limited company for a bank for almost seven years during which time he was contracted directly with the bank and through an agency.

He was ordered to pay IR35 tax during a spell in which he was contracted through an agency.

Despite his long and exclusive association with the bank, it was decided that IR35 payments would be upheld.

Hughes said had the case involved a PCG member they would have been given legal representation by former Inland Revenue inspectors working for the PCG.

"The government has created a legal minefield with IR35 and it is essential that IT contractors are well-prepared to make their case and defend it," she said.

IR35 came into force in April last year and removed many of the tax advantages previously held by contractors who operated through personal service companies.

The tax has come under fire from the Confederation of British Industry, the Institute of Directors and other employers' groups which fear that it could significantly increase the cost of freelance staff for IT projects.

The PCG believes the tax measure is illegal under European law but has failed to have it overturned in the High Court. It is now taking its fight to the Court of Appeal.

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