PCG (the professional association supporting freelancers, contractors and consultants) was established to fight the introduction of IR35, so today’s announcement that it is to be replaced will be welcomed by freelance workers throughout the UK.
It is a triumph for common sense over political dogma.
In the Coalition’s full programme for Government, published today (20th May) the Government declares it will:
“Review IR35 as part of a wholesale review of all small business taxation, and seek to replace it with simpler measures that prevent tax avoidance but do not place undue administrative burdens or uncertainty on the self employed, or restrict labour market flexibility.”
The commitment appears as the fourth of 20 priorities for improving the UK’s ability to do business.
John Brazier, Managing Director of PCG said:
“We are delighted that the new Coalition Government made this commitment to review IR35 as a priority only days after taking power.
“For the last 10 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.
“PCG has led the way in seeking the abolition of IR35 on behalf of our members. It has caused great heartache to many people. The cost in distress has been high, but the revenue for HMRC has been minimal.
“Just look at the figures; they show that of the circa 1,500 IR35 cases PCG was involved with, HMRC has proved additional tax was owed in around 10.
“Despite repeated Freedom of Information Act requests and Parliamentary Questions the Revenue refused to indicate the cost of operating IR35. As I said PCG believes IR35 brought in a minuscule sum, if any, for the Revenue.”
Chris Bryce, Chairman of PCG said:
“Over the last few months the PCG team has had a series of meetings with the Conservative and the Liberal Democrat shadow front bench teams. We are delighted our message was heard and action taken.
“We applaud today’s decision and we will continue to work closely with the Coalition Government to ensure freelance workers are treated with fairness.
“The PCG voice will still be heard working with and advising Government where and when we are needed on behalf of PCG’s 20,000 members.
“Freelancing is a growing and valuable part of the UK economy. We are delighted that at last we have a Government that appreciates this.”
