Date: 25 August 2010
It now looks like the review of IR35 is likely to be more comprehensive than originally thought and take longer. We investigate.
John Whiting, the Tax Director at the newly set up Office of Tax Simplification said recently that he believes they needed to consider IR35 in its entirety.
He conceded that the rules governing IR35 status are not very effective or clear and stated that the OTS had to find out why this had happened.
However, he insisted that the legislation was introduced to tackle real tax abuse and any alternative must still prevent this.
The OTS needs to deliver its report in time for next year's budget but Whiting warns that it will take time to carry out an in-depth review of IR35.
A key issue with IR35 has always been the lack of clarity around defining employment status. Coming up with proper definitions may take some time. It would be pointless to replace IR35 with something equally unclear.
Some experts welcomed the news that the review may take longer than originally expected if that results in a better solution.
Whiting has said that he wants to avoid a 'sticking plaster' solution and if the price to pay is a few more months waiting for a proper, fair and workable solution, it's a price worth paying.
Our advice remains the same – make sure you’re outside IR35 and be sure to adhere to the present rules. For more information have a look in our Information section.
What’s more – we’ll conduct a free review of your contract for you to make sure you’re on the right side of IR35. Please get in touch if we can assist you with this.
So what are you waiting for?
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