Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

IR35 under attack

16 October 2000
Issue: 3779 / Categories: News , IR35
A small glimmer of hope is on the horizon for the estimated 66,000 taxpayers who may be affected by the personal service company provisions in Schedule 12 to the Finance Act 2000. On 10 October 2000 the High Court accepted arguments on behalf of the Professional Contractors Group that the legislation should undergo a full judicial review; this is expected to take place in February 2001.

The basis of the judicial review is reported to be that the legislation represents an illegal provision of state aid to larger companies who are unaffected by it and that it is in breach of the European Convention of Human Rights because it will result in the confiscation of property. Hopefully this second point will embrace the issue of double taxation which has been highlighted in the columns of Taxation; drawing the deemed remuneration from a personal service company in the form of a salary attracts no relief from double liability under the provisions of paragraph 13 of the Schedule which the Revenue does not want to extend on the basis that the need for simplicity overrides the search for fairness.
Arguments will also be raised that the legislation is anti-competitive as it stops small businesses from claiming tax exemptions for training equipment or employing staff.
The...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon