TaxPersonal TaxIR35 branded ‘misconceived’ in court

IR35 branded 'misconceived' in court

The government's IR35 legislation came under attack in London's High Court today when the controversial rules were branded as 'misconceived'.

Anti-IR35 campaigner the Professional Contractors Group is going head-to-head with the Inland Revenue in an effort to have the legislation repealed.

Gerald Barling QC, representing the PCG, told the court: ‘The IR35 legislation is as misconceived as it is wide-ranging.’

He said the measure is likely to adversely affect tens of thousands of genuine small businesses – precisely the kind of businesses which successive governments have purported to encourage.

The regulations will create ‘enormous uncertainty’ as to the status of each and every contract entered in to. It would load companies with an additional and unfair tax burden not imposed on their competitors, undermine their ability to compete and impede continuation or commencement of businesses in the UK, he said.

Barling added IR35 deprives ‘owners of such companies of the fruits of their work in building their businesses’.

He claimed it was legislation which could not lawfully be applied in that it constituted unapproved state aid for some larger companies, infringed European regulations relating to free movement of workers and breached the European Convention on Human Rights.

The hearing, which is expected to last three days, continues. Judgement is then expected to be reserved.

Links

Government foresaw IR35 effects

IR35 High Court showdown begins

AccountancyAge.com IR35 resource centre

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