IR35 – The Government responds to House of Lords report

A little while ago we reported that the House of Lords had effectively recommended the end of IR35 based on the fact that it was costing more to administer than it was getting in through taxation.

The Government has now responded and while it has accepted much of the report, in true Governmental style it is staying to slow down any changes. It is going to ask the HMRC to do a detailed assessment of the full costs of managing IR35 (Sounds like an episode of Yes Minister) and the report to be published in the Autumn of 2014.

Much of the rest of the report is in regard to zero hour contracts through service companies where the staff are effectively self employed and IR35 becomes a grey area.

We can only hope that IR35 is on its way out; although all the service companies that were created to effectively null this legislation will probably be campaigning to keep it.

For more information please see http://www.parliament.uk/business/committees/committees-a-z/lords-select/personal-service-companies/news/personal-service-companies-report-published/