The Tories have said they would review IR35, the tax rule affecting small
businesses and freelancers, if they win power in the General Election.
Shadow business minister Mark Prisk is quoted in the Daily Telegraph
saying IR35 has proved complex, made it harder to be self employed
Figures obtained from HMRC in May last year by the Professional Contractors
Group revealed IR35 had raised just £9m between 2002 and 2008, some way from the
figures originally envisaged.
Reports suggest IR35 was introduced to tackle a £900m loophole thought to
exist because employees were disguising themselves as freelancers by ending
their employment and doing the same work as contractors. The first target was
the IT industry.
Since its introduction in 1999 there has been a concerted campaign against
IR35. Detractors claim it forces contractors and freelancers to be treated
salaried employees by the taxman even though they were never staffers at the
companies they worked for.
The Tory statements on IR35 are the latest in a long line of criticism from
the Conservative Party which identified the tax measure as ripe for change in
a Lower Tax Economy.
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