No change over IR35's five per cent rule

Dawn Primarolo, Paymaster General, has said in Parliament there will be no change to IR35's five per cent rule.

In a written parliamentary question Dr Vincent Cable, Liberal Democrat MP for Twickenham, asked: 'To ask the Chancellor of the Exchequer what plans he has to review the five per cent ceiling for tax exempt expenses under IR35.'

Dawn Primarolo replied: 'Service company workers affected by the service company legislation are entitled to all the same expenses as conventional employees. In addition to these expenses, service company workers are also entitled to a five per cent, flat-rate reduction in recognition of the fact that there are costs associated with running a service company. We have no plans to review the level of this deduction.'

Dawn Primarolo's office recently told UKTECH that the training position for contractors would be 'unchanged' by the suspension of Individual Learning Accounts. In a previous statement Ms Primarolo used the ILA scheme to assure contractors that they would be able to train themselves sufficiently by using the ILA scheme.