Fury at Primarolo IR35 stand

Over the past two months IT contractors have launched a letter writing campaign in London's Evening Standard newspaper, criticising Dawn Primarolo's stand...

Over the past two months IT contractors have launched a letter writing campaign in London's Evening Standard newspaper, criticising Dawn Primarolo's stand on IR35.

The paymaster-general, or Red Dawn as the poll tax "rebel" used to be known, has repeatedly denied suggestions that the tax legislation will "devastate" the UK's IT industry. She has also argued that IR35 provides for "fair taxation of all workers" and says there is no reason why the rules should cause an exodus of IT workers from Britain, despite warnings from contractors that they are now seeking alternatives elsewhere.

Just two weeks ago, Primarolo said she was committed to "fairness in the tax system", and believes IR35 "helps free enterprise". Unsurprisingly, her comments elicited a fresh wave of letter writing from disbelieving IT contractors. Below are excerpts from some of their letters to the Evening Standard.

"British prosperity is underpinned by the "freelance" class, the people with talent and adaptability who are prepared to take short-term contracts, eschew security, learn new skills, and live at the mercy of supply and demand. Freelancers are the lubricant of a changing economy. Without them, how would society adapt to the changes which globalisation and technology thrust upon it?" wrote Alan Lamb, of South Close. "But Ms Primarolo and her insane IR35 have started the process of freelance extinction by removing a fairly small tax and National Insurance advantage."

Steven Weaver, of Sweden, said: "In response to Dawn Primarolo's oxymoronic missive, "IR35 helps free enterprise", almost every assertion she makes is incorrect. One-person companies? Surely she realises that IR35 can apply to any size of company, employing any number of people? The worker need only own at least five per cent of the company and then have the temerity to work for it.

"Equally puzzling is how IR35 might encourage entrepreneurs, as it creates an anti-competitive environment and strongly favours large companies against small. The reason for the vociferous protests against IR35 is that, like the entrepreneurs they are, these people are determined to preserve what they have worked so hard to build. Finally, Ms Primarolo alleges a lack of evidence that significant numbers are moving abroad. Perhaps she is looking in the wrong places."

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19 years on and IR35 has got WORSE and even more people have stopped being contractors.  Net result is a LACK of FLEXIBILITY for companies who relied on a workforce that could easily grow or shrink to implement projects and respond promptly to market demand.  Unlike employees, contractors accepted the risks of uncertain employment and were happy to arrange their own pensions, unemployment insurance and other overheads, and accept unpaid holidays, unpaid sickness, and periods of unemployment.