In respect of the proposals in the Fair taxes section, Adrian Marlowe, Chairman of the Association of Recruitment Consultancies, said:
“Many recruitment businesses will be pleased to see that the Liberal Democrats promise to review the government’s planned change to the IR35 tax rules. A delay in implementation would be welcome given that the rules, based on an assessment of deemed employment status, are complex, likely to catch out the unwary and are unnecessarily forcing a change in behaviour that is affecting businesses.
“No one doubts that tax avoidance in the contractor market should be addressed. However the IR35 plans increase risk and effort rather than encourage proper review of status on a fair basis. The market has already seen many large hirers, banks and supermarkets, taking a blanket decision not to use contractors as a result.
“There will no doubt be reservation over the plan to reverse corporation tax back to 20% unless recent Conservative increases to dividend tax are also reversed. However the general approach of simplification of our tax system must be welcomed, particularly if any review includes modernisation of employment status rules for tax purposes. A proper tax on the large tech company sales may also touch on an area that has been questioned for a long time. Taxes which are raised fairly could clearly assist with the drive to improve our economy, our services and critical climate change measures.”
Read more about ARC’s campaign on IR35 and its extension to the private sector here>>