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Contractors raise £500K for IR35 court challenge

Rules 'contrary to European law'

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It's that time again. After losing the first round of legislation in November, IR35 protestors have raised the stakes by taking legal action against the Government. The Professional Contractors Group (PCG) has drafted in a leading barrister in European law, Gerald Barling QC, to argue that the April Finance Bill, which increases income tax for those employed as consultants by own companies, is unlawful. In a nutshell, the legal challenge will contend that the Bill is contrary to European law since it unfairly taxes one group of people without penalising its competitors. According to PCG spokeswoman Susie Hughes, there are four possible routes the legal challenge may take, but she would not comment further for legal reasons. Barling won a similar high-profile case in 1997 for Lunn Poly, when a court decided part of the Finance Bill was illegal due to a 'unfair and unjust' tax differential. PCG chairman Gareth Williams said the challenge was "an indication of the strength of feeling and injustice that a group of 8000 individuals - the majority of whom voted for New Labour - are now forced to take the Government to court to protect their livelihoods". PCG documents, seen by The Register, appear to confirm this strength of feeling. Despite the fact that Williams is unsure of the exact size of the PCG's membership (6000? 8000?), a newsletter dated 29 March asked members to contribute to a fighting fund. The figure asked for was £250,000. Within five days, 2722 members had pledged funds averaging £200 each, providing a war chest of over half a million pounds. While this is not enormously suprising in itself (let's face it, members stand to gain a lot more than £200 if the challenge is successful), the speed and co-ordination of the group must surely give the Government reason to worry. IR35 protestors have also been making their arguments known through the mainstream media. TV company Granada, as well as BBC Radio 4 and several national newspapers, have complained to the PCG over organised mass emailings. The huge number was clogging up the companies' email systems, they allege. ®

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