Feeds

Tories may scrap IR35 tax rules for contractors

Fairer for freelances

Build a business case: developing custom apps

The Conservatives have pledged a "fundamental review" of the IR35 tax regime if they win the election, claiming it is unfair to freelance IT workers.

The rules were introduced by Labour in 2000 to target the "disguised employment" loophole. Contractors would set up their own limited company and take a low salary to cut their income tax burden, while paying themselves in large dividends to avoid National Insurance.

It prompted an outcry from self-employed IT workers, who mounted High Court challenges and claimed IR35 would cripple the UK IT industry.

Today, the Tories gave their clearest indication yet they may scrap it.

"For the past 13 years, Labour has constantly meddled with the tax rules for freelancers and self-employed," said shadow business minister Mark Prisk.

"IR35 has especially proved to over-complex, uncertain and often unfair. At a time when Britain should be open for business, Gordon Brown has made it harder to be self-employed."

Business groups claimed IR35 legislation was poorly written and harmed legitimate small firms. Last year the Professional Contractors Group publicised figures showing the rules had raised just £9.2m since 2002, compared to the £220m the Treasury predicted.

An examination of IR35 would be carried out by a new "Office of Tax Simplification" under a Tory government, Prisk said. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.