PCG is looking to bring a judicial review over the government’s handling of IR35.

Monday 25 March 2013

Professional Contractors’ Guild (PCG) wants to request a judicial review of how some government departments have handled the IR35 status of their contractors.

Members of the association have been invited to share their own stories as evidence of what PCG believes is unlawful behaviour.

After government policy changed to require contractors to prove that they were compliant with HMRC, PCG advised its entire membership working in the public sector to have independent reviews carried out on their contracts.

PCG says that although this was enough for several departments, it has heard that this is not being applied equally across the board.

Some departments have refused to accept the assessments as valid, many of which have insisted that HMRC is the only body that can carry out the evaluation. Still others have even sought to push contractors into joining an umbrella company, but some have tried to force independent workers to operate IR35 even if they do not believe it applies to them.

Saying that it believes forcing a contractor to work under IR35 if they should not have to is unlawful, PCG is now consulting with lawyers with a view to requesting a judicial review - a process whereby judges are asked to evaluate the legality of a government decision.

The reviews only assess the way in which a decision was made, rather than passing judgement on the rights and wrongs of a policy. If a judge agrees that a decision has been made in the wrong way, they can force the public body to make the decision again but are not able to enforce any other decision.

In theory, this means that a public body could make the same decision again and have it accepted, as long as the decision-making process was found to have been carried out lawfully.

Chris Bryce, PCG chairman, has posted an open letter to members on the association’s website, asking anyone who has been subjected to similar treatment to come forward and allow PCG to represent them. It intends to pay all of the legal costs for each contractor and offer additional support throughout the case.

This will not be the first time that PCG has challenged the government in court to defend contractors’ rights. The association mounted a review against IR35 as soon as it was introduced, but the court found in favour of the government.

There have also been successes - in 2007, Geoff and Diana Jones went to the House of Lords and won a dispute over married couples’ business tax with PCG support. The ‘Arctic Systems’ case set an important precedent for husbands and wives who choose to work together around the UK.

Mr Bryce described the case in his letter as “one of the greatest examples of what the small guy can achieve when he’s teamed up with the right people”.

He called for PCG members to rally round again to combat the government’s “ill-considered” public sector contractor rules, saying that the government had “no right” to force contractors to work in line with IR35 before they had been able to prove their own tax status.

Brookson is an Accredited Accountant Affiliate of PCG, which represents more than 18,500 contractors and freelance workers around the UK.


By Victoria McDonnell

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