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PCG appeals against IR35 ruling

Still contrary to European law, it says

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The Professional Contractors Group is to take the government to the Court of Appeal over the controversial IR35 tax legislation.

In March this year, The PCG, which represents 14,000 independent mostly IT contractors, lost a High Court case which held the tax legislation was not illegal under European law. It would not say at the time whether it would take the case to the Court of Appeal.

It has now decided to do so. Chairman of the PCG Jane Akshar said: "Our members decided to fund an appeal against the High Court decision because we believe we have a good case and we want to fight for our right to run small businesses. These people are hard working businessmen and women whose businesses are being damaged and in some cases destroyed because of unfair treatment by the government."

In March, a High Court judge ruled that while the IR35 measure was flawed and the Inland Revenue's approach needed review, it was not against European law and so would stand as passed by Parliament. The PCG points enthusiastically however to the judge's agreement on nearly all "findings of fact" as presented by the PCG against IR35.

IR35 seeks to treat contractors on short-term contracts as employees of the company rather than independent workers. This has immediate tax implications and strongly affects the IT consultant market which is organised typically on a project-based basis.

The PCG was set up to support the contractors' cause and argues that the law demonstrates the government's lack of understanding of the modern work market. It went to the High Court on the legal point that by introducing the law, the UK government was effectively allowing unfair state aid and creating a barrier to free movement - illegal in European law.

No date has been given for the appeal yet, but a spokeswoman for the PCG told us it expected it to happen around November this year. ®

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