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By Lisa Burroughes, 5 November 1999 00:10

NEWS The government's Welfare Reforms and Pensions Bill has generated more heated debate in the IT industry than almost any other government legislation in recent memory. The situation took another new turn this week, when the House of Commons voted to re-introduce the controversial IR35 tax clauses back into the Bill. The House of Lords will now take a second look at the proposals and most experts believe it will once again vote to remove the section from the Bill. 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 and the 3 sixty group have campaigned strenuously against the legislation since it was first proposed in the last budget. They 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. The groups' 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 ). Vincent Cable, Liberal Party MP, who spoke out against the legislation on Wednesday, said: "The House of Lords will probably reject the clause again, but the government will push it through come what may." The government has until 17 November to come to agreement with the House of Lords otherwise the entire Bill will be thrown out. However, Cable added that it is unlikely to become an ongoing argument between the Commons and the Lords because "the Lords can't push it too far - they don't want to put their peerage position in jeopardy". Cable added that the Inland Revenue and the Paymaster General, Dawn Primarolo, had personally promised him they would discuss with industry the finer details of implementing the Bill. This he said could make all the difference.