PROFESSIONAL CONTRACTORS SUPPORT MP'S IR35 REPEAL MOVE

12.00.00am BST (GMT +0100) Mon 8th Jun 2009

Nearly 100 MPs from all parties have signed a Parliamentary motion tabled by Solihull's MP, Lorely Burt to cut down on over-complex tax investigations for contract workers under IR35 regulations, introduced by the Labour Government 10 years ago.

Mrs Burt, the Lib Dem Small Business Spokesperson, lodged her Early Day motion following concerns raised by the Professional Contractors Group (PCG) that 1.4 million freelancers are being burdened with the cost of preparing for complex tax investigations that they claim have raised no money for the treasury and simply added to financial problems at a time of deep recession.

Mrs Burt's motion "notes with concern the 10 year anniversary of the Government's implementation of IR35; further notes that the 1.4 million freelancers in the United Kingdom face a perpetual threat of a costly and distressing HM Revenue and Customs investigation under IR35; further notes that IR35 obliges freelancers to spend time and money assessing their status as best they can, with contract reviews, tax investigation insurances and negotiations with clients and agencies, and that this effort would be better spent generating wealth for the UK economy… further notes that there is no evidence that IR35 is raising any money for the Exchequer; and calls on the Treasury, in light of the current economic difficulties, to remove unnecessary barriers to enterprise and to abolish IR35 at the earliest opportunity."

Lorely Burt MP said:

"The Professional Contractors' Group has made me aware that of the 1,468 IR35 cases known to them, 1,462 have resulted in no extra tax being owed and there is no evidence that the tax is raising any money for the Exchequer.

"In light of the current economic difficulties, I support PCG and its members and have raised my Early Day Motion to press the Government to abolish IR35 at the earliest opportunity to give freelance workers a fair chance."

John Brazier, managing director of PCG, added:

"I would urge more MPs across all parties to support the Motion to send a clear signal to Government that it must act now, acknowledge just how damaging IR35 is to freelancers and the UK economy and abolish it."