TaxPersonal TaxLords hearing reveals IR35 schism

Lords hearing reveals IR35 schism

Panel split on effectiveness of IR35 rule

A SCHISM OVER THE OPERATION of IR35 emerged during a House of Lords Personal Service Companies Committee hearing.

The legislation, designed to prevent people engaged through personal service companies (PSCs) from taking home more money than they would if they were directly employed, has been the source of various controversies in recent years.

There was public and political anger after it was revealed 2,000 senior office holders of public bodies were revealed to be receiving payment off-payroll, while the BBC revealed in September that 148 of its 467 presenters were engaged in the same fashion.

The committee, chaired by Baroness Noakes, heard the rule is “unwieldy” and “incredibly tough to comply with”.

“Our members always have problems understanding IR35,” the Federation of Small Businesses’ David Ramsden said. “IR35 is a sledgehammer to crack a nut and you only get around it by spending money”.

However, Brookson Accountants’ managing director Martin Hesketh claimed the legislation is adequate, instead calling for greater education and enforcement of the rule.
“Nobody’s come up with a better answer. I would leave it alone”, he said.

He added HM Revenue & Customs ought to be braver in flagging up good practice and poor practice in IR35 matters. He said that the taxman may harbour an “understandable concern” over creating a competitive advantage or disadvantage to organisations.

“The consequence is they never quite condemn the bad stuff openly and publicly”, he said.

Related Articles

The top three issues that the next government must address for accountants

Making Tax Digital The top three issues that the next government must address for accountants

5m Emma Smith, Managing Editor
IR35 reforms set to decimate public sector

Personal Tax IR35 reforms set to decimate public sector

1y Richard Crump, Writer
House of Lords slams ‘inadequate’ HMRC in Finance Bill inquiry

Corporate Tax House of Lords slams ‘inadequate’ HMRC in Finance Bill inquiry

2y Fraser Simpson, Reporter
Calls for IR35 suspension after damning Lords report

Corporate Tax Calls for IR35 suspension after damning Lords report

4y Calum Fuller, Reporter
IR35 investigations quadruple inside year

Corporate Tax IR35 investigations quadruple inside year

4y Calum Fuller, Reporter
Advisers keen to see IR35 shortcomings addressed in Autumn Statement

Corporate Tax Advisers keen to see IR35 shortcomings addressed in Autumn Statement

2y Calum Fuller, Reporter
Abolishing IR35 would cost £550m per year, HMRC claims

Corporate Tax Abolishing IR35 would cost £550m per year, HMRC claims

3y Calum Fuller, Reporter
Scrapping IR35 all very well – but what else?

Corporate Tax Scrapping IR35 all very well – but what else?

4y Calum Fuller, Reporter