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At Prime Minister's Question Time yesterday, leader of the opposition William Hague launched into an attack on the government's IR35 proposals. "When it is so important to encourage small information technology companies to thrive in this country, what on earth are the government doing voting tonight for yet another of the Prime Minister's stealth taxes which will hit precisely those companies?," Hague queried. Tony Blair didn't appear to know what Vague was on about and muttered something about lowering corporation tax. Little Will reminded him: "We are talking about the knowledge economy, and judging by the Prime Minister's answer, he is not part of it. The government will vote tonight for another £500 million stealth tax that affects thousands of small businesses, particularly information technology businesses, and other contractors. That measure is called IR35, but it is really a stealth tax." So far so good. But whether it was a cunning ploy or simple ignorance, Bleurgh didn't seem to have a clue what all the fuss was about. The Yorkshireman tried again: "It is not too late to avert this, so will the Prime Minister look at it again, and vote with us tonight to strike it out of the legislation?" Still nothing. Then came the PM's faltering reply: "We are quite right to introduce this measure. Companies will be treated on a fair basis - the same basis on which everyone pays taxes in this country." Sensing there was no political capital to be made, Hague went for the easy gag: "When the government are driving thousands of IT businesses out of this country, there is no point in posing with a computer every other week trying to be computer-friendly - presumably looking for the on switch." That got a laugh and then it was off to arguing about whose figures for revenue, tax, social services etc. etc. were the more correct. The IR35 issue was then overshadowed when the House debated the Welfare Reform and Pensions Bill - of which it is a part - by the issue of disability benefit. Despite over 50 Labour MPs revolting the Bill was still passed by 325 votes to 265. That may not be the end of it though. Peers in the Lords had announced their intention to introduce the self-same amendments - which included dropping IR35 - when the Bill is heard for a second time. ® Don't email us. Visit The Register's forum and share your views with the world. Related stories IR35 protesters march on Parliament Contractors: cast aside your IR35 fears, Paymaster General says

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