Not at all. It is unfair and largely unworkable. The government still expects to collect the same amount of tax as the utterly unrealistic figure they first thought of. The first change, to shift the heavy burden of enforcement from big to small business, will probably mean the powerful business lobby has largely lost interest in the proposals. The second, the replacement of the control test by the normal employment/self employment rule, removes the worry of the tax professions that this could have been the thin edge of a potentially very horrific wedge. The extent of the third, the relaxation of the expenses rule, is still unclear. It is improbable that there was ever a real political decision to disallow pension contributions or annual return fees, and it is unclear what other expenses will be allowable. This will depend on whether the worker's deemed salary is from a single-deemed employment, carried on from a single base, or the aggregate of the salaries from a number of separate employments, each carried on from where the worker happens to be working at the time. It will be surprising if it were the former. The whole sorry IR35 affair is a textbook example of how to make bad law. Why do people use service companies? Tax legislation imposes an obligation on employers to decide when engaging a worker whether or not he is an employer. This is a burdensome obligation and the cost of getting the decision wrong can be heavy. Some large employers decided to opt out of this obligation. They created a tax avoidance scheme under which they told a prospective worker: 'We will not engage you but if you go away and form a service company we will engage that company.' Why not block this avoidance? By far the largest individual user of computer services is the government. It would be easy for the government to include a provision in its tender document to say that if someone wants government work they must use only employees. But the changes to the IR35 proposals effectively endorse the validity of this tax avoidance scheme. (Yes, I am aware of the commercial benefit of outsourcing work, but outsourcing to anindividual is no different commercially to outsourcing to a service company.) Next there is a perception that a company can obtain a deduction for expenses that an employee cannot. But as the worker is an employee of his service company, logically most expenses that do not qualify under the Schedule E rules should attract a benefit in kind at the service company level. In practice, it has been too much effort for the Revenue to enforce this. Third, and perhaps most important, the real loss that worries the government is not a loss of PAYE; it is a loss of national insurance. Why? Because Gordon Brown has changed the tax system to make dividends more attractive than earnings. It now appears that he did not think through his policy. I cannot believe he is in favour of dividends for large businesses but not small. It is irrational if he is in favour of dividends for builders or small shopkeepers, but against them for surveyors or vets, which is the policy IR35 seeks to introduce. It is equally irrational that someone who has to provide his own equipment, finance his own holiday and sickness time, provide for his own pension, takes the risks of long periods of unemployment, should be taxed in the same way as an employer who has all these things provided for. But IR35 is not about rationality. It is about the government's obligation to the trade unions to stifle self employment. It is about its obligations to big business to limit competition by stifling small businesses. It is about increasing taxes on the middle classes. It represents a return to the old Labour politics of jealousy. I hope that in the course of the Budget debates (just before council elections and the election of a mayor for London) the Conservatives will pledge to abolish this legislation when next in power. I am not holding my breath though! - Robert Maas is a partner with Blackstone Franks.
Some parts of Atacama have not received rainfall for 500 years - but a sudden deluge of water upset the Desert's delicate biological balance
Spitzer Space Telescope could not spot Oumuamua, suggesting that it is actually pretty small
Greenland crater one of the 25 largest impact craters on Earth
This long-sought progenitor star was identified in an image captured by Hubble in 2007