Living With IR35

ONE OF THE most controversial issues in tax in recent years has been the introduction of the rules affecting the provision of personal services via an intermediary known as IR35. Although the rules were implemented with effect from 6 April 2000 the second deemed payment date occurred on 6 April and thus the second IR35 'calculation and filing cycle' has only just begun.

The practical problems relating to IR35 are still new to many tax advisers and there is already evidence that problems exist. For example a recent joint survey by The Chartered Institute of Taxation and the Tax Faculty of the Institute of Chartered Accountants in England and Wales highlighted that compliance costs appear to be a problem. In particular many tax advisers are finding that the time spent on IR35 calculations and related work is both time consuming and difficult to bill.

Throughout...