REC survey shows need for IR35 reform

Date: 9th March 2011

The UK's controversial IR35 tax legislation is in major need of alteration, according to a new survey.

Research conducted by the Recruitment and Employment Confederation (REC) has shown that the majority of recruiters across the country are of the opinion that the rules are in need of "radical reform".

The Office of Tax Simplification is currently looking into the matter as part of its review of small business taxation, and 90 per cent of recruiters feel that is ineffective and "must be reformed".

Jeff Brooks, chair of the REC's technology group, commented: "IR35 has been an awkward, unsatisfactory attempt to tackle the problem of disguised employment ever since it was set up in 1999. These survey results make it plain that the recruitment industry would not accept anything less than a serious overhaul of the current system.

"Whilst many recruiters would be happiest to see IR35 simply removed from the statute book, there would also be support for a pragmatic attempt to clarify the rules. If contractors, employers and recruiters could be certain in advance whether they fall within IR35 or not, many of the current problems could be eliminated."

Posted by Thomas Fletcher