Paymaster General side-steps question on the cost of IR35

Paymaster General, Dawn Primarolo, side-stepped a Parliamentary question about the cost of the implementation of IR35.

A contractor and member of PCG had asked his MP, Graham Brady, to raise the matter with the Paymaster General in Parliament.

On November 15, Mr. Brady (Conservative MP for Altrincham and South West) submitted a written question to the Chancellor Gordon Brown asking what has been the total cost to public funds arising from the implementation of IR35 and the handling of queries and appeals from businesses affected by it.

Dawn Primarolo replied: "So far, the main additional activity undertaken by the Inland Revenue associated with the introduction of the 'IR35' legislation has been the provision of advice to taxpayers and their advisers. This service has been provided by existing staff as part of their normal duties."

She made no reference to:

the costs of the full judicial review permission hearing where the Revenue engaged the services of two barristers, including a leading Queen's Counsel;

nor to the months of preparation currently being undertaken by the legal team for the next stage of the judicial review;

nor how existing staff had dealt with the thousands of requests for contract review, estimated at requiring 4,000 man hours (or two 'man-years') up to last summer;

nor the additional resources for compliance officers, including the creation of 'specialist' regional centres;

nor the additional resources required to deal with thousands of MPs' constituents' questions in one of the department's biggest 'post-bags';

nor does it take into account the millions the Revenue will lose as a result of reduction in taxes from people closing their businesses or moving abroad.

The Paymaster General did not comment on whether the Revenue considers that it has exceeded its proposed budget of £55,000 which it had estimated would be the cost of implementation of IR35.

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Susie Hughes