TechnologyAccounting SoftwareUK government ‘foresaw’ IR35 effects

UK government 'foresaw' IR35 effects

The UK government knew when it created IR35 that it could result in the deaths of tens of thousands of small businesses, the High Court heard today.

The UK government knew when it created IR35 that it could result in the deaths of tens of thousands of small businesses, the High Court heard today.

Branding the hated contractors’ tax changes as “misconceived”, Gerald Barling QC, representing the Professional Contractors Group (PCG), said that from the outset the government foresaw that most of an estimated 90,000 affected companies would close down.

“The effect of IR35 is seriously to disadvantage the affected companies in relation to their competitors to the extent, in fact, of forcing many small contracting businesses to wind up or leave the country,” he said.

“Many other contractors, both inside and outside the UK, have been, and will be, deterred from setting up businesses which might be affected by IR35,” he added.

The PCG claims that IR35 breaches the European Convention on Human Rights because it unfairly discriminates against small businesses.

Barling said: “In sum, IR35 is liable to cause significant and damaging distortions of competition and movement of businesses and workers in relation to the UK knowledge-based contracting industries.”

The hearing began today and is expected to last until Thursday, with a ruling coming as soon as next week.

Also published on accountancyage.co.uk

Related Articles

Accountancy in the digital age: Flexibility, agility, efficiency

Accounting Software Accountancy in the digital age: Flexibility, agility, efficiency

2w Pegasus Software | Sponsored
Sage purchases Intacct in its largest ever acquisition

Accounting Software Sage purchases Intacct in its largest ever acquisition

5m Alia Shoaib, Reporter
5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
UK behind foreign markets in digital accounting, but gap is narrowing

Accounting Software UK behind foreign markets in digital accounting, but gap is narrowing

7m Alia Shoaib, Reporter
The rise of the progressive accountant

Accounting Software The rise of the progressive accountant

7m Emma Smith, Managing Editor
Making Tax Digital: Revolution or revolt?

Accounting Software Making Tax Digital: Revolution or revolt?

8m Emma Smith, Managing Editor
Making Tax Digital: Is HMRC’s recent system fault a cause for concern?

Accounting Software Making Tax Digital: Is HMRC’s recent system fault a cause for concern?

8m Emma Smith, Managing Editor
Four reasons why SME owners should switch to cloud accounting

Accounting Software Four reasons why SME owners should switch to cloud accounting

9m Emma Smith, Managing Editor