The government claims that IR35 was brought in to stop the "Friday to Monday" syndrome -- where IT workers resign their salaried job only to carry on doing the same work, but as a self-employed contractor.
At the High Court recently, a body representing the UK's self-employed IT contractors argued that the government's IR35 tax rules are illegal. Now the Tory Party says that if it wins the election, it will scrap the unpopular rule.
IR35 came into force in April 2000, and increases the tax liabilities of a consultant's personal services company by taxing turnover as income. Lawyers for The Professional Contractors Group (PCG) have argued that this unfairly penalises small IT services providers because large organisations aren't affected, making IR35 in effect an illegal state aid for big companies.
According to the PCG, IR35 will drive thousands of the UK's high-tech workers overseas.
NEWS: Election 2001: Fight isn't over for IR35 Wed, 23 May
Liberal Democrats hope to make IR35 less draconian, and will keep raising the issue in debates
Tory Party promises to abolish IR35 Fri, 11 May
The Conservative leader says he will get rid of the controversial IR35 tax rule if his party wins the election
IR35 campaigners hit the roadWed, 09 May
A series of roadshows will help IT contractors learn how to cope with the Inland Revenue
IR35 rules foster conflictMon, 09 May
Inland Revenue still struggling to work out implementation of tax
IR35 ruling means tax chaosMon, 02 Apr
IR35 will stay but Inland Revenue 'completely discredited' by ruling, claims the group that brought the case over the government's controversial tax law
IR35 decision due next MondayTue, 27 Mar
IT contractors will hear in a week whether they have won their fight to overturn the government's controversial tax law
IR35 could cost companies billions in benefitsWed, 21 Mar
Judge argues that an IT contractor who has to pay the same rate of tax as an employee deserves to get the same benefits
IR35 latest: Contractors face tax chaos Thu, 15 Mar
Judge warns that the PCG has only presented a case for IT workers, not all contractors
IR35 could rob Britain of the next Microsoft Thu, 15 Mar
Thousands of the UK's independent IT workers could move abroad, and take their high-tech companies with them
IR35 tax battle hits the courts Tue, 13 Mar
Professional Contractors Group takes its claim -- that IR35 is an illegal tax boost for big business and restricts the free movement of workers -- to a judicial review
IR35 battle to hit the High Court Fri, 09 Mar
The UK's independent IT contractors aren't happy about being taxed more than the big agencies
Repeal of IR35 mooted Sat, 24 Feb
IR35 taxes are undermining the IT sector
Closing the loopholes in IR35
The laws to discourage tax dodging, should not go so far that they make it better for people to leave the country and work offshore. Guy Kewney isn't sure whether abandoning IR35 altogether is the answer -- but it certainly needs some serious tidying up.
For complete business coverage, see ZDNet UK's Enterprise Channel. Take me to ZDNet's Small Business Special. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read other letters.