Tax law re-write leaves IR35 scope unchanged

In this article, 'Possible increase in Scope of IR35' (March 19, 2003) we commented on a claim that the current tax law re-write appeared to widen the scope of the tax aspects of IR35.

A senior Revenue officer has now confirmed to me that:"The answer is that the new Earnings and Pensions Income Act makes no material changes to the treatment of non-executive directors.

"Section 5 of that Act says that the provisions of the Employment Income Parts that are expressed to apply to employments apply equally to offices, unless otherwise indicated. Chapter 8 (the intermediaries legislation) is not expressed to apply to employments. It applies to services provided through intermediaries. So no change compared to the old legislation."

This seems to confirm my earlier thought that it was unlikely that the Revenue would use the tax law re-write to make a change like this.

Kevin Miller will be one of the speakers at the UKTECH seminar for freelancers and their advisers on April 10, 2003 where he - and other experts - will be available to discuss this and any other threats and opportunities for freelancers.