Press Release 16/01

SMALL BUSINESSES TAKE GOVERNMENT TO COURT OF APPEAL

PCG Appeal of judicial review set for December 4-6, 2001

The Professional Contractors Group is taking the Government to the Court of Appeal from December 4-6, 2001 to seek to prove that IR35 the controversial tax on small, knowledge-based businesses, is illegal under European law.

The Appeal, which has been funded by the membership of the PCG, will claim that IR35 contravenes European legislation on two counts - illegal state aid and a barrier to free movement - and therefore should be removed from the Statute Books.

The original judicial review was held in the High Court in March 2001; and on April 2, 2001, Mr Justice Burton found against the PCG on the points of law; but found in their favour on all findings of fact and was critical of the Inland Revenue's approach to the legislation.

PCG's Chairman, Jane Akshar, said: "The High Court found in PCG's favour on so many factual issues that we felt it was only a small step to prove that not only is this law unfair and uncompetitive - it is also illegal."

The PCG will be operating an office throughout the case and any representatives of the media are invited to call in at any time to meet members and directors for interviews, briefings, updates or photographs. PCG will be in:

The Cheshire Cheese,
5 Little Essex Street,
London WC2 - close to the High Court from 9.30am to 6pm each day (December 4-6, 2001).

(PLEASE NOTE: This is NOT Ye Olde Cheshire Cheese in Fleet Street).

Counsel for PCG are Mr Gerald Barling QC and Miss Kelyn Bacon both of Brick Court Chambers. They are instructed by Tony Askham, head of litigation at Bond Pearce, Solicitors.

PCG will be posting a comprehensive background briefing about the case and regular statements on a dedicated site: http://www.ir35update.co.uk.

IR35 was announced in a press notice after the March 1999 Budget. It treats small businesses in the knowledge-based sector as 'disguised employees' for tax and NI purposes, thereby preventing them from operating on similar terms to their larger competitors.

Notes to Editors;

1. The Professional Contractors Group was formed in May 1999 to lobby against the Government's IR35 proposals. It is a non-party political group and its patrons are cross-bench peer, Lord Weatherill, former Speaker of the House of Commons; and industry guru Sir John Harvey-Jones. Since its formation it has evolved into the representative body for independent contractors from many disciplines including IT and engineering on many issues affecting the knowledge-based sector. It is the fastest growing trade association in the country and now has more than 14,000 members.
2. The PCG's aim is to work for proper recognition of independent contractors as a genuine and valuable sector of the economy, generating wealth and employment, providing industry with a flexible workforce. The Internet has been the primary resource, providing fast, effective communication.
3. The PCG announced it would appeal the High Court decision on August 28, 2001. https://www.pcgroup.org.uk/press_pn1201.html
4. For further information about the PCG: https://www.pcgroup.org.uk
5. For further online information about the judicial review appeal: http://www.ir35update.co.uk

Further information, interviews or case studies of contractors

Susie Hughes

020 7462 7955
[email protected]