24th May 2010

Contractors welcome planned scrapping of IR35

Contractors across the UK have reacted with joy at the news that the IR35 is likely to be scrapped by the new coalition government.

The Professional Contractors' Group (PCG), one of the largest organisations representing British contractors, has moves to fully review the legislation is "a triumph for common sense over political dogma".

IR35 came into force in 2000 to eliminate a loophole that allowed contractors to effectively work as full-time employees for a business but avoid paying tax and National Insurance contributions as an employee.

While catching up many contractors, it was lamented by others who viewed it as bureaucratic and time-consuming, and its rules were unclear.

John Brazier, managing director of PCG, said it was a clear commitment from the government and a keen show of strength.

"For the last ten years, PCG has campaigned for honesty and fairness when dealing with the UK's 1.4 million contractors and freelance workers. With the end of the iniquitous IR35, we have the opportunity to achieve fairness," he said.

Contractor tax specialists are suggesting that people should be patient in waiting for the changes, as it was unlikely that any would be implemented before June's emergency budget.