Chronology

• March 9 1999 - The Budget Immediately following Chancellor Gordon Brown's 1999 Budget, a series of Government press notices were released to deal with the detail of the proposals. The 35th press notice from the Inland Revenue (IR35) announced the intention to introduce measures to counter avoidance in the area of personal service provision. The Chancellor cited the target group for this measure, the so-called Friday-to-Monday workers who leave a company on a Friday only to return to the same job on a Monday as a self-employed contractor.
• March 13 1999 - Engineerjob.com Businessman Andy White, who started as contractor and went on to build several successful, larger businesses, thought that despite the Government's claims to be targeting the 'Friday-to-Monday' workers, they would spread their net much further and target legitimate small businesses. He expressed his concerns to a wider audience through an email newsletter and his web-site www.engineerjob.com to see if others shared his concern. Within two week, the site had received 40,000 hits.
• April 22 1999 - IR releases draft proposals. The Inland Revenue releases its draft proposals relating to IR35 and requested comments from interested parties. It was then clear that the original concerns had been well-founded as the target was now plainly any small businesses which worked in the knowledge-based sector. The proposals indicated that, unlike other businesses, total turnover should be treated as salary for tax and NI purposes - preventing expansion, investment or even allowing the company to make a profit.
• May 4 1999 - PCG formed Following the response to the engineerjob.com newsletter, 2000 contractors agree to fund the start up of their own group to represent their interests in IR35. And so the Professional Contractors Group was formed.
• May 13 1999 - New clauses While the Revenue was still receiving comments on its proposals, draft new clause were tabled for inclusion in the Welfare Reform Bill giving effect to the proposals.
• May 17 1999 - IR35 enters legislation The new Clause giving effect to IR35 was voted through at Third Reading of Welfare Reform Bill in the House of Commons and was included in the legislation.
• May 21 1999 - Closing date for comments Several days after the IR35 provisions had been put into a Parliamentary Bill, came the closing date for comments to the Inland Revenue on its draft proposals.
• May 21 1999 - Regulatory Impact Assessment The Government's Regulatory Impact Assessment which examined the effect of IR35 was published on a DSS website. It showed that IR35 would close 66,000 small businesses and gain the Revenue more than £400m.
• June 10/11 1999 - IR meetings A month after IR35 was introduced into Parliament, the Revenue held its first consultation meetings with the interested parties, including the Professional Contractors Group, about the draft proposals.
• June 10 1999 - Lords Second Reading Second Reading of the Welfare Reform Bill in the House of Lords. The subject was debated but in keeping with Parliamentary convention there was no vote at this stage. However, there was an indication from several Peers that they felt the proposals were introduced without full consideration and were damaging to small businesses.
• June 20 1999 (and other dates) - Lords Committee Clause 70 debated in Committee Stage in the House of Lords. The Government spokesman Lord McIntosh promises further discussion in the summer with interested parties in return for the Opposition Peers not pushing the matter to a vote.
• September 4 1999 - Financial Times Although the Revenue had promised consultation during the summer, none had been offered. Then the Financial Times reported that there had been a series of secret meetings within the Revenue and that it was about to announce its decision.
• September 22 1999 - IR calls meeting Perhaps as a result of the concern over reports of 'secret meetings' and 'decisions behind closed doors' the Revenue invited several groups, including the PCG, to a meeting. During that meeting the groups were told that Ministers had had already reached a decision and an announcement would be made shortly.
• September 23 1999 - Self employment tests The day after the meeting with the various pressure groups, the Revenue announced that, after 'consultation' it had revised its proposals. The principle remained the same but the test moved from the 'illogical' direction, supervision and control - to the 'unworkable' self-employment tests. The self-employment tests belonged to a pre-high tech era and do not fit as a measure for evaluating a knowledge-based business. As the PCG said at the time, it was like asking someone to weigh something and providing them with a ruler to do it.
• October 13 1999 - IR35 defeated in the Lords When the Welfare Reform Bill returned to the House of Lords at Third Reading, the Peers signalled their dissatisfaction with the IR35 proposals and the manner of its introduction. After a heated debate, the Lords rebelled against the Government and voted Clause 70 - containing the IR35 provisions - out of the legislation.
• October 27 1999 - PCG's RIA The PCG produced its own Regulatory Impact Assessment, factoring in items which had been omitted by the Revenue. When they took into account loss of income from people who would move overseas, losses in corporation tax, increased compliance costs and other costs, the PCG found that IR35 would cost the Revenue £700 million rather than the predicted £400 million gain.
• November 3 1999 - Contractor Wednesday Despite the Lords removing the measure from the Welfare Reform Bill, the Government indicated that it intended to use its significant majority to reintroduce the clauses in the Bill. The PCG organised 'Contractor Wednesday' and invited any of its members to come to Parliament to discuss their concerns with their MPs. More than 700 businessmen and women arrived at the House of Commons to discuss their concerns with their MPs.
• November 3 1999 - Commons reintroduce IR35 Despite this show of concern and the fact that the Government's backbenchers were deserted during the debate on the reintroduction of IR35, the Government whipped the vote and IR35 was back in the legislation.
• November 8 1999 - Back to House of Lords In keeping with Parliamentary, the Lords, while continuing to oppose the measure, did not remove it for a second time and IR35 became law in the Welfare Reform and Pensions Act 1999.
• November 12 1999 - IR release Draft Guidelines Mid- Dec 1999- PCG has an unproductive meeting with Paymaster General Dawn Primarolo.
• February 1 2000 - IR publishes guidelines - with the opinion that standard agency contracts over a one month duration would be within IR35.
• March 13 2000 - Finance Bill clauses The Inland Revenue published the draft regulations and the clauses on IR35 which would go into this year's Finance Bill.
• March 26 2000 - PCG's contract gets IR approval April 6 2000 - Implementation Implementation of IR35 provision
• April 6 2000 - PCG launches Judicial Review
• May 17 2000 - Tax Faculty give three out of ten The well-respected Tax Faculty of the ICAEW analyses IR35 and the manner it has been implemented and awards the Government a poor three out of ten.
• July 7 2000 - Joint letter The Financial Times publishes an open letter from the PCG, CBI and FSB criticising IR35 and calling on the Government to rethink before it's too late.
• July 28 2000 - Royal Assent Finance Bill receives Royal Assent
• Summer 2000 - Fast track visas 'in' and IT contractors 'out' As a number of survey reveal that about 25 per cent of IT contractors where considering leaving the country because of IR35, the Government announced measures to introduce fast-track visas for non-EU residents with IT skills.
• October 10 2000- PCG wins permission in the High Court to judicially review IR35.
• Jan 25 2001- PCG membership hits 11,000