'Genuine businesses are not affected by IR35' says PMG

The Paymaster General - Dawn Primarolo has told the House of Commons that 'Genuine businesses are not affected by IR35' in a written answer to a Parliamentary Question.

The question from Mr David Drew - Labour MP for Stroud, asked the Chancellor of the Exchequer what advice was currently being offered by Inland Revenue officers to businesses that may be affected by IR35.

Dawn Primarolo responded: 'Genuine businesses are not affected by IR35. IR35 only applies where, if it were not for the interposition of an intermediary such as a service company, the worker would be an employee of the client. The Inland Revenue provides a free service to anyone who wants advice on the application of the IR35 rules. This includes providing opinions on contracts of engagement and a dedicated IR35 helpline.'

A second question from Mr Drew asked what discussions the Chancellor had had recently with the Professional Contractors Group concerning IR35.

Ms Primarolo replied: 'None. Inland Revenue officials have met with members of the Professional Contractors Group executive to discuss practical issues arising out of the application and operation of the IR35 legislation.'

Dawn Primarolo's Departmental responsibilities within the Revenue remain mainly unchanged despite the recent re-shuffle, bar a stronger responsibility over European taxation issues. Her slightly amended job description lists her primary responsibilities as being:

• Strategic oversight of taxation as a whole, including overall responsibility for the Finance Bill, closer working between Inland Revenue and Customs & Excise (including with other departments), and European and international tax issues;

• Departmental Minister for Inland Revenue and the Valuation Office;

• Personal taxation (except company car tax, savings and pensions), national insurance contributions and tax credits;

• Direct business taxation and tax aspects of the enterprise agenda, including: corporation tax, North Sea taxation, share schemes, small firms and venture capital;

• Capital Gains Tax;

• Inheritance Tax;

• Treasury interest in childcare issues;

• Regulatory Reform Minister for the Chancellor's departments; and

• Welfare Reform Group (welfare fraud).

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Richard Powell, UKTECH