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The ARC takes action on IR35 proposals

The ARC takes action on IR35 proposals

The Association of Recruitment Consultancies (ARC) debate in London on 22 January and recent news stories on contractor websites have produced much debate about the proposed changes to the IR35 tax laws and how big the impact on contractors may be.

Confusion remains around the definition of & lsquo;office holder’ within the proposals some experts have argued that case law limits the definition of what an & lsquo;office’ is (therefore limiting the number of contractors affected). Conversely, advice received by the ARC is that the wording within section 5(3) of the government’s proposal is actually very broad and could result in many contractors being caught by the new legislation.

A government source said that the Treasury is not planning to use the amendment to scoop more contractors into IR35 tax rules but the ARC believes that the proposals are not safe as they currently stand policies and administrations may change in the future.

Adrian Marlowe, Chairman of ARC said: “The solution is to amend the legislation to make sure that & lsquo;office’ is clearly defined with the sort of limited scope that case law suggests, although as usual even that is unclear.

“It would be helpful if the government could clarify both the aims behind these proposals and their meaning.”

The ARC has reviewed the document in its usual detailed, forensic manner and submitted full recommendations for amendments to the Treasury and HM Revenue & Customs today, 6 February.

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