"Ridiculous nonsense of IR35" slammed in Parliament
Mark Prisk, the Shadow Financial Secretary, called IR35 a "ridiculous nonsense" and accused MPs of regarding it with too little importance in a recent Parliamentary session.
The Financial Secretary was replying to a challenge by Rob Marris, Labour MP for Wolverhampton South West, to name three regulations that represented a burden on business, which the Conservatives would be prepared to repeal.
Mr Prisk responded: "One regulation I feel strongly about, because it has affected me and many others, is the ridiculous nonsense of IR35 for which the Treasury is directly responsible. Members may find it of no consequence, but it is of great consequence."
Mr Prisk said several people had attended surgeries in his constituency of Hertford and Stortford, telling him of the damage IR35 is having on their businesses in recent months.
He read out part of an IT freelancer's submission to the British Chambers of Commerce.
It said: 'I am seriously thinking of either moving my business to a more tax-friendly environment where e-business initiatives are supported and understood or to change the nature of my business entirely. The UK, having now implemented the IR35 initiative, is as far as I am concerned not a place to be doing serious e-commerce related internet work any more.'
Recent feature articles on UKTECH illustrate how IT Directors have had to change business sectors to escape the legislation.
"IR35 is hurting businesses, which is why my party is committed to scrapping it," Mr Prisk said.
The Shadow Financial Secretary's pledge ends speculation that the party had done a u-turn on its commitment to repeal IR35. Iain Duncan Smith told UKTECH in April that there was no longer a party policy on it.
Mr Prisk's comments represent the second Conservative party attack on IR35 in the House of Commons in as many months.
In November, Alistair Burt, Parliamentary private secretary to Iain Duncan Smith, raised IR35 whilst talking about "crippling" red tape and regulation.
He told Chancellor Gordon Brown, before he gave the Pre-Budget Report, his reluctance to address mounting problems in areas of regulation was leading to a lack of general industry confidence in him.
Mr Burt cited a survey in which more than 1,000 businesses were asked whether legislative changes had helped them.
"Changes in legislation were felt to have been far more negative than positive. Employment legislation changes were felt to have had a positive effect by only four per cent of businesses compared with 35 per cent, who felt they had a negative impact. A similar story was true of responses on business taxation, such as IR35," he said.