Contractors across the UK may be interested to hear that the Chancellor’s decision to retain IR35 has come under heavy shelling from a leading contributor to the OTS review of small business taxation.

The PCG, which played an active role in the review, has published an open letter on its website expressing profound disappointment that Chancellor George Osborne failed to suspend IR35 legislation in his recent Budget. Signed by the organisation’s Chairman, Chris Bryce (who describes himself as “an ordinary contractor), the letter likens contractors under IR35 rules to dolphins caught in a tuna net. Mr Bryce said that he believed HMG, a majority of MPs and the Coalition Treasury team recognise that ‘catching’ most dolphin-like contractors in their tuna nets is inherently wrong. He added that he thought some HMRC agents would agree. How, he asked, can the tuna nets be shaped to catch only tuna and not dolphin?

Announcing PCG’s intention to participate fully in the proposed new IR35 Forum, Mr Bryce also said that, in preparation, his organisation’s website would be publishing suggestions for “lines in the sand” and “rules of engagement” for consultation with PCG members over the next few days.

Urging pragmatism, he warned that the Government was under no obligation to accept PCG and that drastic demands for outright abolition at this stage would merely make the organisation look foolish. It will, however, “always be PCG’s aim that IR35 is abolished” but while it is in place, “we must fight to ensure that our members and all genuine freelancers are free to do business without the burden of IR35 hanging over them.”

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