Chancellor 'Canute' meets Star Wars

A search of the Parliamentary record, Hansard, gives 52 'hits' for IR35 in the week following the Budget.

Considering that the Chancellor did not talk about it in his speech this year - or in fact even mention it when it was 'introduced' last year, this is possibly a Parliamentary record - and sends a clear message that MPs are hearing about this weekly in their constituencies.

The week after the Budget is traditionally devoted to Departmental debates about the detail of the Chancellor's proposals. Conservative leader, William Hague, opening for the Opposition, clearly flagged up IR35 as a stealth tax and many Opposition spokesmen and constituency MPs continued the theme with their own experiences.

Shadow Chancellor, Michael Portillo, winding up for the Opposition used IR35 as a by-word for stealth tax. He said: "The Chancellor has become a Canute-type figure, wishing away the tide of global competition and closing his eyes to the threat to the London stock exchange that is posed by the lower rates of stamp duty in other markets. He ignored the threat to gambling revenue from internet gaming. He failed to see that higher tobacco might reduce revenue and boost smuggling, but he has pressed on regardless.

"Now we come to the infamous IR35. In this Budget, the Chancellor doubled his estimate of how much that tax would raise--and so we must now double our estimate of how bad will be the brain drain and how bad will be the damage to Britain. IR35 is one of the taxes that this Chancellor of the Exchequer never even announced in the House of Commons. This year, he showed at least some consistency by not announcing another stealth tax that also is aimed at the new economy and that also sounds like a character from "Star Wars". This year's IR35 is called BN2J. BN2J is the Chancellor's stealth tax on British world-beating companies and an attack on double taxation relief."

Despite requests for clarification, the Government has not explained why it has nearly doubled its expected 'take' from IR35 to over £900 million.