19th August 2010

IR35 review must consider entire temporary workforce

Proposed alternatives for IR35 legislation must take into account the needs of the entire temporary workforce, an expert has said.

The coalition has pledged to address the contentious system as part of its forthcoming tax review, leading to much anticipation from workers who have called for the abolishment of the current regulations.

However, Kate Cottrell of Bauer & Cottrell said the investigation must cover the flexible labour market as a whole if a viable alternative is to be put in place.

She pointed out that is not realistic to simply label workers 'freelancers,' 'contractors' or 'consultants', as there are other factors which must be taken into account.

"It will be necessary to deal with the agency temp effectively forced to work through an intermediary through to the highly skilled worker genuinely in business," she said.

"The one thing that most temporary workers have in common is that they applied for a job often through an agency as an individual, irrespective of the presence of their own limited company or umbrella or any other structure."

The Office of Tax Simplification recently said it would need to consider IR35 legislation in its entirety if proper progress is to be made.