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House of Lords to pick up IR35 debate

I knew they would get around to it eventually: the House of Lords has said they would be picking up the IR35 debate soon, specifically just how effective it is.

Much has been made over the past few years about how personal service companies are being used by some Brits to disguise their employment under the guise of contracting in order to avoid paying their fair share of taxes. IR35 enforcement has been ramped up in an effort to crack down on the practice, but the tactic has been heavily criticised for making the lives of actual contractors hellish; now, the House of Lords says it will be taking a close look into whether the pursuit of these personal service companies is truly effective or not.

Now if you ask me, it’s about bloody time that someone took a good, hard look into how IR35 might be more trouble than its actually worth. There’s so many sleepless nights being lost right now amongst many contract workers as to whether or not they’re going to be investigated under IR35 that it’s really starting to have negative effects on the economy – if people are too scared to hire on contractors and freelancers because they’re afraid they’ll be targeted by an IR35 investigation, it’s going to have a serious economic impact. Taking into account how integral contractors are to the economic growth of the UK, anything that stands in the way of firms using interim workers to their best and fullest is something that needs to be examined very closely.

Hopefully the House of Lords will come to the same conclusion that so many others already have: that the Government’s focus on IR35 enforcement is bollixing things up more than actually making things better. I know that the Treasury is champing at the bit to scrape every last penny out of the pockets of the average Brit because it’s too scared to go after multinationals that are so good at tax avoidance, but with the Government taking out its frustration on the rest of us is patently unfair. Let’s be honest: do you really think the extra cash that flows into HMRC’s coffers by increased IR35 enforcement is going to make a difference? If you think it will, you’re damned stupid. Or a Government minister.

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