The Conservatives have suggested that they will review unfair taxes if they win the General Election which has lead many to believe that they would scrap the contentious IR35 rule. However, an email received by a reader of Contractor UK from an official at Conservative Headquarters has said that repealing that law is only one of a number of options and such action could result in “unintended consequences”.
The email read: “Having consulted with business tax professionals and freelancers, it is clear that simply scrapping IR35 would not resolve many of [the] issues around the taxation of small businesses. Indeed it would, on its own, be the same piecemeal approach which has failed under this government. So instead a Conservative Government would undertake a fundamental review of small business taxation matters, including IR35. We would mandate the new Office of Tax Simplification to conduct this review, with the aim of creating a comprehensive and lasting regime.”
IR35 advisor, Kate Cottrell told Contractor UK: “It [also] shows that the Tories understand that abolishing or scrapping IR35 is a completely unrealistic and wholly unworkable measure. IR35 underpins lots of other legislation and regulations.”
Similarly, former tax inspector Bob Jones reflected: “In 39 years’ working for the Revenue…in my opinion scrapping IR35 on its own will not work. Something will have to take its place but it must not stifle the economy. Coming out of a recession is not the time to be making life difficult for the self-employed”.