Tories say they will repeal IR35 legislation

Hague finds another bandwagon to jump on

The Conservative Party has said it will repeal the IR35 tax legislation - which causes IT specialists to pay much more in tax - if they're voted in.

Forgive us for being rude but IR35 protestors - specifically the Professional Contractors Group - have been fighting tooth and nail since 1999 to get their case heard, have heavily lobbied the House of Commons, Lords, hired a lawyer and taken it to the court through the Human Rights Act.

Nowhere down the line do we remember the Conservative Party showing any interest in the legislation which treats contractors turnover as salary - removing the tax offset of equipment or training and not allowing them to retain a profit - but then a general election hasn't been approaching before.

Actually that's not strictly true. Back in November 1999, when the Bill containing IR35 was passing through the Commons, Hague attacked Tony Blair over the measure. When Tony patently had no idea what Willy was on about, Hague gave up and moaned about other things.

Hague's trade secretary David Heathcoat-Amory did have some strong words to say against the legislation yesterday. Unfortunately there were all aimed at scoring political points.

The Conservatives have not promised to reinstate the previous situation however. They will replace IR35 with "targeted legislation" to deal with any abuse of the situation - which, is precisely what the government thought it was doing with IR35. The Tories say its plan will only bring in a third of what the government currently makes form IR35. The Conservatives, we should point out, have also claimed seemingly impossible increases in spending and reductions in tax if they get voted in.

Of course this is academic to the PCG and IT contractors who welcome any political pressure to get the measure repealed. Its chairman said: "All we have ever asked for is that the Government should carry out a full and proper consultation, to determine the extent of any problem and to ensure legitimate businesses are not affected. It is encouraging that the Conservatives have recognised the damage IR35 is causing to small businesses and are prepared to listen and consider the situation before they act." ®

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