News Extra: Inside the IR35 war room

Upstairs at the Cheshire Cheese in Little Essex Street, just a stone’s throw from the Royal Courts of Justice, members of the PCG beaver away keeping the organisation’s website up to date with the latest news from the court.

Tea urns are on the go, contractors drop in out for snippets of news, staff tap away on laptops and every now and then the hubbub falls silent as the latest blow landed against the Inland Revenue in court is announced.

‘There is a real blitz spirit here,’ says Richard Robson an IT contractor working as a volunteer press co-ordinator for the PCG.

To recap the PCG has raised nearly Pounds 1m for a barrister to appeal against IR35 in the High Court. The Inland Revenue is defending the tax rule, but the PCG believes its case is good. Essentially they claim it unfairly discriminates against small businesses.

IT contractors, North Sea oil workers and many other one-man bands working through service companies claim their livelihood is in real danger of being destroyed by IR35.

And it appears some corporate finance advisers are also feeling the pinch of IR35.

‘We had one in yesterday,’ says Robson. ‘But because he didn’t know a thing about IT we thought he was a Revenue spy.’

For their part the Revenue, and paymaster general Dawn Primarolo, say IR35 puts contractors on an equal footing with salaried workers doing the same job but currently paying more tax. What IR35 essentially does is say a contractor working through a service company is really an employee and should be paying the same amount of tax and national insurance.

On Tuesday Gerald Barling QC, – a ‘bright chap with a reputation for winning these sorts of things’ – began the argument for the PCG. On Wednesday after lunch the Revenue’s man got up to make the government’s case.

There is some concern the case will not finish by the Thursday finishing date, but there is also confidence that the judge is well aware payments under IR35 are due on the 19 April.

Back at the Cheshire Cheese hush falls as news has come through that judge Mr Justice Burton has hinted if the PCG loses the hearing he may issue guidance, with the authority of the High Court, which would lessen the effects of IR35.

‘That’s the best news I’ve had in months,’ says Richard Robson.


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