IR35 tax rule 'too complex'

The taxation system for those in self-employment is too hard to navigate, it has been claimed.

IR35 tax rules are "complex and ill-defined", according to ITContractor.com, as those affected by the legislation are calling for its reform.

The Recruitment and Employment Confederation (REC) reports that 90 per cent of its members in sectors affected by the system feel it is ineffective and needs to be changed.

Gerry McLaughlin from ITContractor.com explained that when IR35 was introduced for those in self-employment, the government "threw a nail bomb at the problem rather using a laser gun".

It was hoped that the legislation would catch so-called disguised employees to ensure they were properly taxed.

However, Mr McLaughlin said the system has caught too many people in its net, noting that the paymaster general at the time was aware of this problem.

"It wasn't just the contractor's way of working that defined it. A contractor could be IR35 liable on one contract and not on the next," he added.


Published on: March 10, 2011

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