The PCG was set up specifically to lobby against the tax which
was announced after the March 1999 Budget. It sought judicial
review to have the legislation wiped from the statute books,
arguing that it was illegal under European law. The Court of Appeal
today disagreed, as did the High Court before it, in April this
year.
The PCG said this morning that it welcomes the comments from the
judges which recognised that the tests facing knowledge-based
workers dated from the 19th century and that the dividing line
between employment and business for PCG members was “often
debatable”. The PCG has argued for more than two years that the
tests its members had to use were the equivalent of “using a rule
to try to weigh something.”
Speaking immediately after the Court of Appeal had rejected the
Group’s judicial review, PCG’s Chairman Jane Akshar said:
"The judicial review was one part of our
overall strategy but was not the whole part. It represented one
possible knock-out blow for this unfair legislation. The court has
found that IR35 is not illegal, but that is not to say it is right
or fair. Tens of thousands of small businesses have to try to
operate with the uncertainty and unfairness of it and the PCG will
continue to do all we can to remove this unfair burden on small
business.
"For the past few months, we have been
preparing to launch a series of legal test cases, which will
establish case law where there is currently a vacuum. We will drive
through case law which is relevant to the way knowledge-based
businesses, such as IT and engineering, operate in the 21st
century, rather than the 'upstairs, downstairs' rules which belong
in the 19th century and are currently in use by the Inland
Revenue."
"The PCG will continue to represent the
interests of these businessmen and women in legal and commercial
arrangements. We will drive test cases through the court which
demonstrate beyond a shadow of doubt that our working practises are
those of genuine businesses and I predict that within the next two
years, IR35 will be a voluntary tax, as knowledge-based companies
will be able to demonstrate with certainty that they are real
businesses."
