The judicial review of the IR35 tax legislation concluded Tuesday
night at the High Court in London. The judge said he hopes to be in
a position to give his decision in the course of next week,
although no firm date has been set.
The case was brought by the Professional Contractors Group (PCG)
which was formed to campaign against the tax. It says IR35 means
that many small companies, mainly in IT and engineering, are unable
to operate on equal terms with their larger competitors since their
turnover is treated as salary for tax and National Insurance
Contribution (NIC) purposes. They are therefore, says the PCG,
unable to make or retain profits, unable to allow business expenses
such as training and equipment against tax and cannot invest for
the future or plan to grow or develop.
The government argues that IR35 was a necessary introduction to
close a loophole that allowed some people to avoid paying tax and
NICs by operating through a personal service company.
