IR35 shocker
27 May 2009 in Company, Employment, Individual, Investigations It is more than shocking, it is a disgrace.
With this year seeing the tenth anniversary of the introduction of the internediaries legislation (IR35), and with the related service company compliance issues continuing to cause a disproportionate compliance burden on small business, the PCG has used the FOI to obtain details of the tax collected under the provisions.
An average of only £1.5M a year, and that's before HMRC collection and dispute resolution costs. Whilst this figure is not even 1% of the extra revenue the legislation was projected to collect in when first introduced, the true figure may well be higher when the deterrent effect is quantified; with contractors volunteering employee taxes rather than facing the risk of a prolonged and expensive argument with HMRC.
Nevetheless, it must surely now be time, especially given the present state of the economy, to abolish IR35.
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