FSB and PCG tell Lords IR35 should be scrapped, FSCA disagrees

A House of Lords committee yesterday heard calls for the abolition of the IR35 legislation aimed at cracking down on disguised employment - although an FCSA representative tells recruiter.co.uk he opposes that proposal.
Tue, 17 Dec 2013

Chris Bryce, the chief executive officer of freelancer organisation PCG, and David Ramsden, the taxation and finance affairs chair at the Federation of Small Businesses (FSB), say they want IR35 abolished.

Bryce told the House of Lords Personal Service Companies Committee: “The simple fact is, IR35 is outmoded and unnecessary. We, along with the Federation of Small Business, seek its abolition.”

And Ramsden, speaking to recruiter.co.uk today, says: “When IR35 was proposed we said it was wrong, it was unnecessary and that although there was some abuse, this was a sledgehammer to crack a nut, and our view has not changed.”

But Martin Hesketh, the managing director of Brookson Accountants, having appeared in his capacity as a member of the Freelancer & Contractor Services Associations (FCSA), tells recruiter.co.uk that IR35 is in reality “workable”, adding: “I don’t think it’s that difficult.”
He says he realises his view that government should “just leave it alone for a few years” is “not a popular one”, but that this approach would be better than lawmakers, who have consistently failed to understand the complexity of the matter, creating potentially more nuanced legislation which could have “catastrophic” consequences.

Samantha Hurley, the Association of Professional Staffing Companies (APSCo) head of external relations, appearing instead of CEO Ann Swain as previously listed, says: “While we are pleased that HMRC is reviewing its guidance, we do have very real concerns regarding the misuse of the Business Entity Tests, which are being utilised by some public sector departments to define an individual’s employment status for tax purposes.”

She tells recruiter.co.uk that APSCo wants "more clarity" and ideally to have "a clear and consistent definition of what a personal service company is... in legislation", adding that she thinks it is unlikely IR35 would be scrapped altogther without something new being created in its place.

Hurley also repeats views common to all those giving evidence, that government must realise that there is a difference between highly skilled contractor professionals and low-paid temps, and that misunderstanding this would be damaging to a vibrant and productive section of the UK economy.

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