Judge Burton, referring to the ‘double standards’ in IR35, said that if a worker were to be taxed according to IR35 legislation – at a rate equivalent of fulltime employees – then the worker would have a very good case for claiming full employment benefits. These could include pensions, sickness payment and paid holidays.
This extra cost of employment could make IT managers wary of hiring IT contractors, thus reducing the demand for their services.
A spokesperson from IT managers association Premit told Computer weekly said: ‘It would be a double edged sword for contractors – they would receive more benefits but would probably find less work.’
And a strategic advisor at the Institute for the Management of Information Systems predicted that if employers lost the cost benefits of hiring IT contractors, they might move their operations abroad, or hire foreign-based consultants.
The judicial hearing on IR35 ending on Tuesday this week with the Revenue rebuffing claims by the Professional Contractors Group that the IR35 violated European Law and could be construed as state aid for large companies. The Revenue claimed it was a generalist measure aimed at stamping out tax avoidance.
A ruling is expected some time next week.
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said
UK-based non-doms have paid ten times more tax than the average taxpayer, raising concerns over the Brexit impact on non-dom contributions and therefore, the economy