Letwin resists repeal of IR35 at Conservative Technology Forum
About 50 contractors sent a clear message to the Conservative Treasury team that they won't be bought off with shallow promises to reconsider IR35.
Professional Contractors Group members and UKTECH readers met Oliver Letwin MP, Conservative Treasury spokesman at a meeting of the Conservative Technology Forum to discuss future policy on IR35.
Oliver Letwin MP surprised some of the group by admitting sympathy for Dawn Primarolo. Mr Letwin surprised some of the group by saying that he had some sympathy with Paymaster General Dawn Primarolo as there was a problem which needed addressing. Where he disagreed with her was the manner in which the Government had attempted to solve the problem with IR35. He was resistant to making any commitment to remove IR35 and preferred to have it revised in order to target the abuse more accurately.
However, he was unable to give a clear definition of what the 'abuse' was, citing one example of that of John Birt the former BBC director general. He also proffered a possible 'solution' of exempting contracts which were under one year's duration.
Gareth Williams, the PCG's chairman tabled an aptly titled position paper 'We Wouldn't Start From Here' and explained that although the Conservatives understood that IR35 was a bad law, they had made a fundamental error in accepting the Government's description of the problem.
Gareth told the meeting: "It is wrong to start from the premise that people establish companies merely to avoid NIC. We do not see IR35 or anything like it as being the solution to any genuine problem. We would suggest that the Conservative Party should be sceptical not only of the Government's 'solution' in the form of IR35, but of its entire analysis of the 'problem', and its assertion that there is a major 'tax avoidance' issue to be addressed".
"In our view IR35 should be repealed and the flawed assumptions on which it was based should be re-examined. The PCG is more than willing to contribute to this process" Gareth Williams PCG Chairman told Oliver Letwin and the contractors at the forum.
A sometimes heated question and answer session followed when Mr Letwin was left in no doubt that contractors would view any 'solution' which put small companies at a disadvantage compared to their larger competitors as unacceptable.
The conclusion of the meeting was that PCG would be invited to meet again with the Treasury team, and Mr Letwin left with a much better understanding of the real problems and a message that a quick-fix Band-aid solution was not the answer.
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Susie Hughes