IR35 and moral panic
So the House of Lords select committee has reported on personal service companies. There is a lot more to this than IR35 because it is important to examine the reasons for the growth of the phenomenon, explains Simon Sweetman.
They say: “We were interested to discover that an entire industry has emerged as a result of the IR35 legislation and that a simple internet search returns numerous companies, publications and member bodies which exist to advise individuals of their tax position, campaign for reform and report relevant developments in the area as a whole.”
Well, it may have been news to them. Bizarrely enough, all sorts of people refused to talk to them. That included representatives of the IT and banking industries, and even stranger was David Gauke’s refusal to attend or to permit Treasury officials to attend. The ways of Westminster are sometimes very strange.
HMRC’s estimate is that there are 200,000 PSCs as against 90,000 in 1999 when the IR35 legislation was introduced: So if IR35 was supposed to stop this, it hasn’t.
We have all grown hardened here, and the comments attached to articles on the website see us all trolling out the same comments and arguments as we have all been trolling out for the past 10 or 15 years. We peg back our ears and try not to listen. The OTS tried hard to take a fresh look, but its suggestion that IR35 could be suspended to see what happened was turned down by HMRC.
So are PSCs...