IR35 branded unnecessary by freelancer group

Freelancer group PCG is calling on the Government to explain the need to retain IR35.

The call comes after PCG used a Freedom of Information request to get HM Revenue and Customs (HMRC) to release the latest figures, which showed that just 23 cases were examined between April 2010 and April 2011, raising a tax yield of just £219,180.

In total, HMRC has examined a total of 322 cases in the last five years. PCG claims that the yield from IR35 is minimal compared to the stress and damage it has caused to the UK’s 1.4 million freelance businesses.

It was announced in this year’s Budget that IR35 was to be reviewed, but PCG chairman and IR35 Forum member Chris Bryce believes that chancellor George Osborne should remove ‘this barrier to economic growth and do it as soon as possible’.

“He has a great opportunity in the November statement to release businesses from this ridiculous burden and free up HMRC resource to work on better things,” he said.

Meanwhile, considering the release of the HMRC figures, PCG is calling for the Exchequer to explain why the revenue raised from IR35 is worth keeping.

John Brazier, managing director at PCG said: “Despite the now evident worthlessness of IR35 it remains in place and, as directed in the Budget this year, its administration is being reviewed. PCG is currently working hard with the IR35 Forum to reduce the impact of IR35 but this new data reiterates what PCG has always believed, IR35 should be scrapped.

“It is now time for the decision makers to explain more clearly to freelancers and the public why the risk to the Exchequer would be simply too great if IR35 was abolished or suspended.”