PCG halts judicial review appeal as £328,875 legal fund backs case law

In this issue:

• MESSAGE FROM JANE AKSHAR, CHAIRMAN OF THE PCG
  
• PCG advice on IR 'PAYE' visits

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1. MESSAGE FROM JANE AKSHAR, CHAIRMAN OF THE PCG

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THE LEGAL FUND

"Members of the PCG have paid £328,875 and pledged a further £94,303 towards the PCG's legal fund in nearly two weeks. Allowing for a number of 'cheques in the post', this means that we have raised sufficient funds to ensure that we will continue our legal fight against IR35 by actively pursuing the 'case law strategy'. Since IR35 was introduced we have complained that the problem with the 'tests' to determine employment status belong to a bygone era and are unsuitable to the flexible business practice of our knowledge-based members. The case law test cases we will now drive through will force the law to catch up with the realities of the situation.

"It will be a long-term approach but we will change the goalposts and that, in combination with educating clients and providing information, will reduce, if not remove, the impact of IR35, for a significant proportion of our membership. We will be sending out detailed information about the types of cases we want to sponsor and will be looking for volunteers from within the PCG membership to volunteer to be our 'test cases'. We are confident that we will achieve successes.

"For the past two years, much of the focus of PCG has been on the judicial review - our potential knock-out blow against IR35. We have consistently taken legal advice on this strategy which we have known has been high-risk but has also promised high rewards. Realistically the next stage was all the way to Europe via the House of Lords. This would have taken two to three years and cost an estimated £350,000. We had to look at the full amount - there were no half-way measures.

"Throughout the JR, the members have voted with their cheque books. If they were prepared to fund it, we were prepared to run with it. On this occasion, we broke the appeal into two sections - the first £350,000 cash would be ring-fenced for case law; the second £350,000 in pledges or cash would be for the judicial review. As the second stage fell well short of this target, we have decided that it would not be in the best interests of the membership of PCG as a whole to begin this legal process which we could not guarantee to fund to conclusion.

"I would like to thank at this point, Gareth Williams, Neil Wilson, David Ramsden, all the members who contributed so much either in terms of money, time or support to 'make a difference'.

"Having been refused leave to appeal by the Court of Appeal, we had to decide by January 21 if we would try to appeal directly to the House of Lords for permission. We have instructed lawyers not to proceed beyond this point.

"I know that many members have expressed personal preferences of case law over JR or JR over case law. This route might not be the preferred choice of everyone. However, I know that while we might debate which way we fight IR35, we are united that we should fight IR35. I believe that case law offers us a real opportunity to, at worst, dilute the impact of IR35 for most of our members, and at best, have our method of doing business exempted in its own right and our business practices recognised, in law, as a genuine way of being in business.

"Case law offers the opportunity for us to trail-blaze and create new laws with relevance to the 21st century. PCG members will have first-mover advantage in sharing information as case law develops. I would like to thank everybody who contributed to this fund. This is an effort to be proud of, especially in these difficult market circumstances."

Further information about PCG's case law strategy is here:

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2. PCG advice on IR 'PAYE' visits

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If your business is due for a compliance visit from the IR, then PCG has produced a set of FAQs relevant to PAYE visits and the tax investigation insurance.

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The Editor