OTS warns that IR35 review will take time

Date: 22nd July 2010

Sole traders in the UK have been warned that the new Office of Tax Simplification's (OTS) review of IR35 will not be a speedy process.

Earlier this week, the coalition confirmed that the OTS's first task will be to undertake a review of small business taxation in the country, which will include seeking alternatives to the controversial IR35 legislation.

However, John Whiting, OTS tax director, has claimed the fact that IR35 is still standing is testament to the difficulties involved in coming up with replacement measures.

The expert told advice website ContractorUK that a quick fix or immediate abolishment is out of the question due to these complexities.

He claimed that proposals will therefore not be put forward to chancellor George Osborne and exchequer secretary David Gauke until next year's Budget.

"They will be able to accept or reject our reports because ultimately they have the responsibility for the tax system," he told the news provider.

"But I would hope that if we do our job properly, our recommendations will be easy to follow; and if they do reject unreasonably, they will get lots of questions as to why."

Posted by Jacob Williams