Does anyone know...

[DaveB]

It's not political, it's economic. For the same - or even a slightly lower - cost of employment, moving your chambermaids to self-employment means you are absolved from ERNICs, pension funding, assorted insurance overheads, holiday and sick pay and any kind of notice period when times are hard and you need to lose people. There are an awful lot of people on low wages who are also company directors.

The political motive is to prevent that level of abuse - except the only way our ill-informed and inexperienced-in-business MPs can see to do it is through punitive taxation which then kills off genuine self-employment, rather than putting the load back on to the end client where it belongs..

Which was the ORIGINAL point of IR35, to prevent Friday-Monday incorporation either instigated by employers wanting to do just that or by employees wanting to take advantage of the taxation benefits. It's HMRC that have taken it and tried to apply it beyond the original remit.

[jamesbrown]

Which was the ORIGINAL point of IR35, to prevent Friday-Monday incorporation either instigated by employers wanting to do just that or by employees wanting to take advantage of the taxation benefits. It's HMRC that have taken it and tried to apply it beyond the original remit.

I don't think that was the original remit at all. It was always intended to be much broader than that. As I recall, they simply issued a press statement with this as an example (which is more about selling the idea to a broader audience). The original point of IR35 was to minimise the perceived Exchequer risk from individuals incorporating (whether squarely for tax purposes or for a combination of good and "bad" reasons) and this was always best achieved by keeping the remit broad and open to interpretation by the courts, with just enough compliance to maintain the perception that the risk was real. It was never intended to have a narrow remit, otherwise it would've been easily tackled through narrow legislative mechanisms.