Tories pledge to repeal IR35

With an announcement on an election date imminent, and close observers expecting 3 May to be the big day, David Heathcoat-Amory, shadow secretary of state for trade and industry, revealed today that he is pledging to reverse the hated tax measure.

He said: ‘IR35 was a sly measure which turned into a disastrous attack on the IT sector. In seeking to eliminate the bad, it destroys so much that is good. The government fails to understand that contracting out is a legitimate and growing practice in IT and other sectors.

He added the Tories were ‘taking positive steps to free people who are essential to the new economy from this repressive measure’.

IR35 was introduced by the government as a measure to force contractors working through service companies to pay what it described as a ‘fair’ rate of tax.

The measure has proved highly controversial and will be the subject of a High Court review on 12 March.

The move represents a policy switch for the Tories. At the Conservative Party conference in October, Heathcoat-Amory indicated that, were they to win the next election, the Tories would only review IR35. At that stage he refused to commit to removing the measure.

Anti-IR35 lobby organisation the Professional Contractors Group welcomed the commitment to repeal IR35.

PCG chairman Gareth Williams, said: ‘The Conservative Party is committing to do what the government has failed to do – that is to consult with interested parties, understand the problem and then introduce appropriate legislation.’


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