Gordon Brown’s PBR gets Smarter on IR35

In Gordon Brown’s pre budget report last week there was some interesting information on likely changes to the IR35 legislation.

And it seems they’ve finally worked out the group of people they want to catch, which is people who work through limited companies for a single employer, who enjoy permanent status, perks, benefits and so on.

Typically these are individuals who work through so called composite companies; employed by the limited company, and are shareholders but who don’t hold executive status, I.e. not a Director.

“From April 2007, draft legislation will strip away the unfair competitive advantage for hundreds of thousands of contractors who today use managed service or composite companies.”

Unlike limited company owners, these workers are “not in business on their own…and the underlying nature of the contracts…is one of employment”, the government decided yesterday.

From what my accountant says, they’ve had help drafting up this legislation from actual honest to goodness accountants, KPMG no less, whi’ve looked at the market and drafted legislation accordingly.

If this does end up becoming law, I’m going to have to kick myself for saying it, but “well done Gordon”

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Phil Harding

SharePoint Consultant, Developer, Father, Husband and Climber.

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