Category: Employment Law, Taxation and Legislation for Contractors

Contractors using umbrella companies are going to have to wait in order to find out about alterations to the IR35 provision, according to a newspaper, and one expert believes that abolition of the legislation could be just around the corner.

The Financial Times reported on the uncertainty which has emerged since the Emergency Budget was released after it revealed that the new coalition government only wanted to review the small business taxation.

"Despite having existed for more than a decade, the rules are still perceived as being poorly thought through and have led to hundreds of tax cases against HM Revenue & Customs, many of which the government has lost," the publication reported.

Francesca Lagerberg, head of tax at Grant Thornton added that the abolition of the IR35 provision maybe on the cards.

Chris Sanger, Ernst & Young's head of tax, told ContractorUK.com that now could be a good time for the IR35 provisions to be stripped down and if this does not happen, in the short term, he could see tax avoidance continue to be a problem.

Posted by John Crawley