Freelancers and Contractors unhappy with the Labour government’s IR35 leglislation may now be able to see light at the end of the taxation tunnel.
Before the election the Tory team were hinting that they’d “review” IR35 if they got into power, but yesterday saw the first strong commitment from small business minister Mark Prisk.
“We want to make sure that we could undertake a comprehensive review of small business taxation in a way that makes the need for the current IR35 legislation redundant” said Prisk in an interview with The Telegraph.
This looks like a strong signal that freelancers and contractors will see a permanent change to the way they are taxed and, according to Prisk, the review, which will affect 1.4m freelancers, is expected to be launched this summer.
Part of the shake up looks due in part to HM Revenue & Customs looking to reduce cost in how the “pay as you earn” tax collection system is administered. According to the Telegraph HMRC will “consult payroll providers this summer to see whether a ‘real time’ data system can be adopted”.
Chris Bryce, Chairman of PCG, the Freelancer’s group who have led a long and tireless campagin agains IR35, said: “Our talks with both Parties in the Coalition when they were in Opposition gave us the confidence that if they were in Government they would tackle the problem of IR35. Today I am delighted to say there is now real momentum behind the abolition of IR35.”
“We are delighted that Mark Prisk has said publicly what he has said to us privately and we are very pleased that important organisations like Grant Thornton, FSB and other leading bodies now take the same view as us. There is still much work to be done but we hope we can work with the Government and these other organisations to find a fair and acceptable settlement for all freelancers and contractors.”
Read more: * About IR35 * From the PCG * From the Telegraph
