Contractor sets out point-by-point case for scrapping IR35

Well given this request I have done just that and for those of you interested here is the text of my reasons;

1. The following organisations have all requested this;

FSB, ICAEW, PCG, The Tories, The Liberal Democrats, The House of Lords.

2. Everybody describes it as unfair. Including the Inland Revenue in their previous statements. Although they did later try to retract these statements.

3. It was originally justified under the Friday-Monday situation, but this is already covered under existing case law.

4. Contractors to which it was aimed do not have the choice. The 1988 Finance Act requires contractors to form a limited Company, ergo they have no choice and further the supposed 'tax' advantages do not enter into the equation.

5. The IR say that previous case law should determine a person's status however once the law was passed they admitted that no such case law exists. Also they have chosen to ignore previous case law (see 3).

6. It is supposed to increase the Chancellor's tax take, however most contractors pay more in tax than they ever did as permy's. Since by the admission of the Paymaster General no one will want to work as a contractor within two years of the legislation it is generally expected that those left will return to permy life if they did not leave the country.

7. It is somewhat perverse to put out of business a group while spending great sums trying to persuade other people to come into the country. The IR state in their latest figures (it keeps going down) that £200m will be made by IR35. If one assumes this is correct, the Fast Track Visa bill currently runs at £1billion!

8. It was the intention to ensure that IT Contractors (and Engineers) paid the same level of tax as their fully employed colleagues but Contractors pay both Employers and Employees NI Contributions therefore as a percentage of Income those falling foul of IR35 they pay an extra 12%.

9. It is ridiculous to expect any person in business to quote for work without knowing what the cost of the work will be. However this is exactly what the IR expects. A Contractor must often sign a contract within one or two days of an offer. However the IR say they can confirm if a contract falls within IR35 in 28 days. Nearly a month after the contractor starts the work.

I'm sure given time my fellow contractors could think of a number of reasons why the IR35 regulations are nonsense but these are the ones that sprang to my mind.