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CBI, FSB, PCG ask for rethink on IR35

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The battles may have been lost but the war continues. Having covered lobbying both Commons MPs and the House of Lords, talking to every media outlet that will listen and started a case in the European Courts, critics of the IR35 tax legislation have written a high-profile open letter in the Financial Times calling on the government to reconsider the measures.

Signed by the director general of the Confederation of British Industry, Digby Jones; chairman of the Federation of Small Businesses, Ian Handford; and chairman of the Professional Contractors Group, Gareth Williams, the letter urges reflection, commenting that the current legislation will be detrimental to small businesses and damage Britain's efforts in the hi-tech industry.

It called the measures "unfair, poorly targeted and ultimately unworkable". The full transcript is given below:

"Sir, as representatives of industry and small business, we would urge the government to reconsider the IR35 measure, currently before parliament in the Finance Bill 2000.

"This legislation, which will treat small businesses as employees for tax and NIC purposes, will prove detrimental to the small business sector, the knowledge-based economy and the UK's drive to lead the world in high-technology. The legislation will also discourage entrepreneurs to remain UK-based tax payers.

"While we support the government's attempts to create a fair taxation system and support measures to crack down on blatant abuse, the IR35 provision is unfair, poorly targeted and ultimately unworkable. We would call on this government to draw a halt to this, while there is still time to do so, and to consider a better way forward."

Subsequently, Gareth Williams became a little less polite: "The government continues to display unbelievable arrogance in firstly ignoring the evidence, and then when it's hitting them in the face, dismissing it with half-truths. They are now so out-of-touch with small businesses and e-commerce, that they are not just presiding over its demise, they are actively encouraging it, without even realising what they are doing."

Gareth appears to feel quite strongly about this.
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