By Lisa Burroughes, 4 November 1999 12:31
NEWS The government's IR35 proposals are to be re-introduced to the Welfare Reforms and Pensions Bill after a vote in the House of Commons last night. However, the Bill will now return to the House of Lords on Monday where most experts believe it will be rejected again. Clauses 71 and 72 target one-person service companies using limited company status to avoid paying full tax and national insurance. However, groups representing IT contractors such as the Professional Contractors Group (PCG) and the 3 sixty group have campaigned strenuously against the legislation since it was first proposed in the last budget. It argued that the proposals cast the net far wider than necessary and would damage the UK economy by putting thousands of genuine IT contractors out of business. Their campaigning led to the House of Lords voting-out the clause on 13 October (see 'IR35 rejected as Lords defeats UK government' http://www.silicon.com/a33378 ). But the government has insisted that it will not back down and after making amendments to the Bill in September, Paymaster General Dawn Primarolo wrote in an open letter to the press: "What we now propose is fair, targeted and proportionate. It allows the flexible market for skilled labour to continue." (see 'IT industry left fuming over IR35 revisions' http://www.silicon.com/a32965 .) If the House of Lords rejects the legislation a second time on Monday, the government may be forced to make further changes to push the Bill through.
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