There is no more momentum behind the industry push to abolish IR35 than there was in May, before the Budget, when the state merely pledged to review and replace it.
Hopes that the government might go further by entirely scrapping 'the deemed payment rules' were dashed by the Budget only reaffirming that the review is planned.
They were then raised, however, with the Daily Telegraph's publication of an interview with small business minister Mark Prisk, a vocal critic of the legislation.
Appearing to speak after the Budget, the minister apparently explained that IR35 "will now be abolished," the newspaper reported, without quoting him as saying so directly.
The interview seems to have encouraged some accountants to claim victory for the contracting community, notably Grant Thornton's head of tax Francesca Lagerberg.
Explaining that personal service company users have suffered under the rule for "over a decade", she said "the hoped for abolition of IR35 looks very much on the cards."
But since her comments, it has emerged that Mr Prisk did the interview several weeks before the Budget, and that he did not, in fact, say "IR35 will now be abolished."'
Having contacted the minister's office, and HM Revenue & Customs, FreelancUK understands that the government's position on IR35 is what it was two months ago.
"The review of IR35 is linked to the proposed wider review of small business [tax]," HMRC said. "Until the precise terms of reference are agreed, we cannot say much more."
Meanwhile, a Department of Business spokeswoman confirmed that the government is to review IR35, and added that Mr Prisk merely restated this in his interview, which was not given to the Daily Telegraph after the Budget.
Editorial image courtesy of the Prime Minister's Office
Jul 8, 2010
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