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In the Administrative Court today Mr Justice Gibbs gave permission to the Professional Contractors' Group to Judicially Review the IR35 provisions. PCG had maintained that it had a case which was fit for further consideration by the Court at a full hearing, and that its case was clearly arguable.
PCG seek to set aside the IR35 provisions on the basis that:
- they constitute a prohibited State Aid in that large and small consultancies in the sector are treated differently for tax purposes.
- they create obstacles to the free movement of workers and the right to provide services within the European Community
- they infringe the EHCR now enforceable in England via the HRA
The Inland Revenue contended that the measure could not be a State Aid as it did not confer an advantage on large companies because IR35 does not provide for taxation of companies at all. Mr Justice Gibbs indicated that it is artificial to suggest the legislation has no effect on the companies who are members of PCG.
There will be a full trial, likely to last about three days, not earlier than 5th February 2001.
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Susie Hughes
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