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Office of Tax Simplification REC Sector Groups drive for IR35 review

Office of Tax Simplification REC Sector Groups drive for IR35 review
Following last weeks launch of the new Office of Tax Simplification (OTS), the REC underlined some of the key priorities for recruiters and contractors including a comprehensive review of IR35.
The OTS will undertake two initial reviews over the coming year, focusing on tax reliefs and small business tax simplification. In a letter to the Chair of the OTS, The Rt Hon Michael Jack, the REC has supported moves to develop alternative legislative approaches to IR35.  This has been an ongoing issue for specific sector groups within the REC such as the Technology Sector Group and the Interim Management Association (IMA).
Commenting on the need to influence the new OTS, Jeff Brooks, Chair of the REC Technology Group says: "Over the coming year, the work of the OTS will have huge implications for the contractor market place. Specialised Recruiters in the IT and technology sector are in daily contact with contractors and have regularly flagged up the challenges that current taxation requirements create. We will be working constructively with Government and with the OTS to feed into the forthcoming reviews and to help streamline the current tax regime for those operating in our market".
Paul Botting, Chair of the Interim Management Association (IMA) said:"A review of IR 35 is long overdue and will help to simplify flexible working options such as interim management. Interim executives and managers are key drivers for both growth and efficiencies and should not be stifled by an overly complex tax system. The voices senior interim managers and their providers must be at the forefront of the debate over the coming year. 
The OTS will publish the initial findings from their work on reliefs in late autumn and on small business tax by the 2011 Budget.
IR35 legislation was introduced in 2000 to counter avoidance of tax on employment income where workers receive payments from a client via an intermediary (usually a personal service company) and the relationship between the worker and the client would otherwise be one of longer term employment.


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