News from the PCG

Edition 5 9th March 2009

By joining the PCG, you get access to the discussion forums on the Professional Contractors Group members site, which should give the latest news and advice on what is going on in discussions with the Inland Revenue, and also the latest tips/advice on the effects of the measures as it becomes clearer exactly how IR35 will be implemented.

If there are any contractors out there who haven't paid to join this group and support its work on your behalf, then please join it, its the least we can all do to fight to protect our future.

It now seems that the key to defeating the new IR35 legislation is to be on 2 fronts:

- By making sure that new contracts are drafted with the necessary clauses, and that working practices are changed in line with the new contracts, we can try to make sure that if we are challenged by the Inland Revenue that we can either get them to back off, or else to have a very good chance of defeating them in court. Thus the route to defeating this legislation is through the courts if necessary to establish new case law. Unfortunately there are still too many contractors with their heads in the sand, who will provide soft targets for the Inland Revenue. The other effect of this is that there are too many clients out there who think that it is okay to carry on as they are. Or there are others who believe that they can insert a "Right of Substitution" clause in their contracts and then carry on as before. This is not a very safe path to tread, without some other pointers to the fact that they are genuine businesses that can pass the old self-employment tests. It is possible that such a clause could be a defining clause, but there is no guarantee, particularly if it looks as though it is not genuine, and is there to disguise the true nature of the contract. But we shall see....

- The second route would be a legal challenge to the legality of the legislation. The attempts by the PCG to get a judicial review of the new legislation are now dead and buried, the challenge was unsuccessful. So the best way to operate is to have a good understanding of the IR35 legislation, and how to make it clear that your business passes the self-employed status tests. See above.