Pressure groups pile on IR35 pressure

Industry groups united earlier this month to urge the Government to rethink its IR35 tax rules and to find "a better way...

Industry groups united earlier this month to urge the Government to rethink its IR35 tax rules and to find "a better way forward", before the controversial legislation is passed through Parliament.

In a joint letter published in the Financial Times, the Confederation of British Industry, the Federation of Small Businesses and the Professional Contractors Group, appealed to ministers to halt the measure before causing what they believe will be damage to the UK economy and to the country's "high-technology drive".

"This legislation, which will treat small businesses as employees for tax and National Insurance purposes, will prove detrimental to the small business sector, the knowledge-based economy and the UK's drive to lead the world in high technology," reads the letter. "The legislation will also discourage entrepreneurs to remain UK-based taxpayers. While we support the Government's attempts to create a fair taxation system and support measures to crack down on blatant abuse, the IR35 provision is unfair, poorly targeted and ultimately unworkable."

PCG chairman, Gareth Williams says the letter makes it clear to Government that representatives of all sections of the business community are opposed to IR35. "They (the Government) are now so out of touch with small businesses and e-commerce that they are not just presiding over their demise, but are actively encouraging it, without even realising what they're doing," he adds.

The PCG plans to take legal action against the Government on the basis that IR35 contravenes European competition law.

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