Tax experts unsurprised by IR35 blow

John Whiting, president of the Chartered Institute of Taxation and a partner at PricewaterhouseCoopers, said: ‘This is what most of us expected. It’s disappointing but at the same time this was the likely outcome.’

The Professional Contractors Group, the industry body for many self employed contractors, including thousands in the IT sector, heard this morning that its latest efforts to get rid of IR35 had failed on the Court of Appeal.

The group immediately pledged to go on fighting.

‘In my heart of hearts its also the right outcome because parliament is sovereign when it comes to tax,’ said Whiting.

‘The Court of Appeal ruling fundamentally says that there’s nothing that stops the government bringing in a rule that may upset people but that’s what tax rules are there to do.’

However, Whiting said IR35 remained problematic and work would continue with the Revenue to iron out difficulties.

Chas Roy-Chowdhury, head of tax at ACCA, agreed the ruling was not a surprise.

‘The fundamental problem is that IR35 is unfair and doesn’t give the proper reward for those taking risks in running their own business. There’s been no commercial thinking behind it.

‘The government just assumed the IT industry was just fleecing the tax collectors.’


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