UKTECH Exclusive: Ken Livingstone speaks out against IR35

Ken Livingstone, the Mayor of London, has added his support to fighting IR35, telling UKTECH, "It is a 'withholding tax', hampering the innovation and skills of this country not present in other places like New York and Tokyo that are climbing ahead."

Mr Livingstone told UKTECH at a British Chambers of Commerce reception in London's County Hall: "I am fully behind the PCG and I support them and what they are doing. IR35 is counter-productive."

Livingstone: Told directors of UK's biggest businesses 'IT companies I've met with are only employing from abroad'

During his speech to the reception, which included directors of major national companies, senior journalists and representatives from various charities, Mr Livingstone said, "I recently had a meeting with three senior IT firms of which two of them told me they were employing all of their specialists from abroad. From India, from Europe and from America, but none from the country they are operating in."

Director General of BCC, Chris Humphries: 'We've been against IR35 since day one and we hope the PCG win the judicial review'

He enlarged on this part of his speech afterwards telling UKTECH, "That's what they tell me and I believe them… Young people are great at video games and working out things like gambling odds on computers but they are just not going into this essential IT sector on which the future of British business is depending."

Chris Humphries, Director General of the BCC and organiser of the reception, also told UKTECH, "We have been against IR35 since the very first day and believe it is a fundamentally flawed piece of legislation. It is hurting enterprise in this country and is doing the exact opposite of everything the Government says it is good for."

The head of the Institute of Directors has since joined in accusing Chancellor Gordon Brown of complicating the tax system just as this story was going to press.

Director General George Cox told the British Chambers of Commerce that the 'increasingly arcane' tax system had grown unchecked.

He said, "Every Chancellor wants to introduce his 'tweaks' for fiscal or political reasons; pressure groups lobby continuously for special treatment; tax advisors spot and exploit loopholes and the Inland Revenue changes the rules to thwart them. No Government has shown any appetite for tax simplification, but the problem has worsened recently as the Inland Revenue consistently extends the use of the system adding to a laudable philosophy of operation and consequent administration processes that, put simply, becomes another matter in itself."

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Richard Powell, UKTECH