Introduction
“IR35” is a piece of tax legislation announced in 1999, which took effect from
April 2000. (See What is IR35?)
The legislation means that HMRC can tax some contractors as though they
are employees of their clients. For those caught it means paying significantly
more tax.
This article provides an IR35 overview and lists the key events in the history of IR35.
1999 - IR35 History
| Event |
Date |
Detail |
|
IR35 measures announced.
|
Mar 1999
|
Initial HMRC IR35
press release announcing the measures to counter tax avoidance in the
area of personal service provision with the intention of them taking effect
from April 2000.
|
|
PCG formed.
|
May 1999
|
PCG formed to combat the IR35 proposals.
|
|
Modified IR35 measures accounced.
|
Sep 1999
|
Second press release
detailing a modified
approach based on consultations:
-
onus on the service companies to follow rules;
-
service companies to collect the tax rather than the clients.
-
Existing tests for self employment to be used.
-
Flat rat of 5% allowed for non Schedule E expenses.
|
|
Passed in Commons.
|
Nov 1999
|
After peers backed
down, the
Welfare Reform and Pensions Bill (which contained IR35) passed in the
house of Lords.
|
2000 - IR35 History
| Event |
Date |
Detail |
|
Revenue publishes IR35 guidance.
|
Feb 2000
|
HMRC publishes FAQs
for IR35.
|
|
IR35 becomes law.
|
Apr 2000
|
Finance Act published
– schedule 12
being specific to IR35.
|
2001 - IR35 History
| Event |
Date |
Detail |
|
Judicial Review
|
Mar - Apr 2001
|
PCG took HMRC to a
Judicial Review.
High Court dismissed
the PCG and IR35 remained law.
|
|
First IR35 case loses.
|
Aug 2001
|
Battersby versus Campbell.
First case to go before Special Commissioners is lost.
|
|
Second IR35 case loses.
|
Dec 2001
|
F S Consulting Limited vs McCaul.
Second case to go before Special Commissioners is lost.
|
|
Judicial Review - Appeal
|
Dec 2001
|
Judges dismiss
appeal by PCG.
|
2002 - IR35 History
| Event |
Date |
Detail |
| PCG focuses on case law
|
Jan 2002
|
PCG drops legal fight with HMRC to focus on case law.
|
|
First IR35 case won.
|
Oct 2002
|
Lime IT vs Justin
First case to be won at the Special Commissioners.
|
2003 - IR35 History
2004 - IR35 History
2005 - IR35 History
2006 - IR35 History
2007 - IR35 History
2008 - IR35 History
Published: Wednesday, December 27, 2006