MP's Parliamentary question leaves a further doubt over IR35

PCG noted with interest that Labour MP Terry Rooney (Bradford North) asked this question in the House of Commons on 15th June.

Mr. Rooney: To ask the Chancellor of the Exchequer how many investigations concerning IR35 were launched in each of the last five years; and how many of them resulted in (a) prosecution, (b) an increase in tax due and (c) no further action.

Kitty Ussher: The intermediaries legislation, commonly known as “IR35”, was introduced with effect from 6 April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries.

Disclosure of HM Revenue and Customs' compliance data relating to the legislation would result in a risk of non- compliance with the legislation. Accordingly I am not able to provide the data requested.

To our knowledge, it is unprecedented for a Minister of the Crown to refuse to answer a Parliamentary question because that answer would result in a risk of non-compliance with the legislation.  PCG does not see it as being in the public interest that the effectiveness of tax legislation should be shrouded in a veil of secrecy.

 PCG suspect that Miss Ussher gave the answer she did because the full truth would expose IR35 to further ridicule, following on from PCG's revelation that based on HMRC's own data obtained by PCG under a FOI request, IR35 brings in only £1.5m per financial year.

PCG Board member, Gary Sharp, commented: "The Government has never previously stated that information on the financial details of IR35 would encourage people to ignore it - this is a new development. No-one in PCG would ever suggest anyone breaks the law. However we know IR35 is, ineffective, inefficient, costly to taxpayers and Government alike. It is frequently misapplied and if you are paying, we could well surmise from this Parliamentary answer, that you could be in a minority."

PCG has now lodged a further Freedom of Information request with HM Treasury & Customs, asking exactly the same question as Mr Rooney.  Watch this space!