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PCG calls for action in light of IR35 tax yield figures

PCG calls for action in light of IR35 tax yield figures

PCG is today calling on the Government to explain more clearly why IR35 was retained. This comes in light of HMRC’s response to a freedom of information request which revealed IR35’s recent yield and that only 322 cases have been examined in the last five years. (http://www.hmrc.gov.uk/freedom/ir35-status-enqs.htmor see tables below).

John Brazier, Managing Director of PCG, commented:

“These figures confirm what PCG has always said, that the tax yield from IR35 is minimal and that the stress and damage done to the UK’s 1.4 million genuine freelance businesses is completely unnecessary. It also shows us that IR35 is an unwarranted measure introduced by the previous Government.

“Despite the now evident worthlessness of IR35 it remains in place and, as directed in the Budget this year, its administration is being reviewed. PCG is currently working hard with the IR35 Forum to reduce the impact of IR35 but this new data reiterates what PCG has always believed, IR35 should be scrapped. 

“Over that last 12 years PCG's advice to contractors has taken them out of IR35 operationally. It is now time for the decision makers to explain more clearly to freelancers and the public why the risk to the Exchequer would be simply too great if IR35 was abolished or suspended.”

Chris Bryce, PCG Chairman and IR35 Forum member, commented:

"I'm not surprised, it's what we've thought all along but I'm amazed, appalled and angry that so many people in the private and public sectors are wasting their valuable time on IR35 if this is all it takes in. Chancellor George Osborne simply must remove this barrier to economic growth and do it as soon as possible. He has a great opportunity in the November statement to release businesses from this ridiculous burden and free up HMRC resource to work on better things."

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