The budget specifically addressed IR35 and said the following:
IR35 Articles
When becoming a freelance contractor there are a number of important decisions you need to make. The first is ensuring you get a contract that best suits your skills and not just offers the best rate of pay but will still present you with opportunities to increase your skill set and so contribute to your career.
Following on from yesterdays budget the key changes for contractors working through Umbrella Companies or through their own Personal Service Companies (PSC) can be summarised as follows:
The Office of Tax Simplification are set to report on their review of IR35 today 10th March 2010. The aim is to give the Chancellor 2 weeks to absorbe the recommendations prior to his budget.
In HM Treasury's own word the prupose of the Small Business Tax Review was (http://www.hm-treasury.gov.uk/ots_smallbusinessreview.htm:
Working through your own Limited Company is often the most financially rewarding, however does bring some further responsibilities. This guide will take you through the benefits, responsibilities and the process of setting up.
Following the Office of Tax Simplification review of IR35 and the Government proposing to keep IR35 in the last Budget, HMRC have introduced a forum to review how administration is being improved.
The day has finally arrived and contractors will be eagerly waiting to see what the Chancellor, George Osborne, proposes to do with the much hated IR35.
Much hated because it is not always clear to contractors whether they will be caught by it or not and the effects of being caught could mean a large unexpected tax bill.
In the Budget Report the following was said about IR35:
Following publication of the OTS (Office of Tax Simplification) review of small business tax, the Government commits to making clear improvements in the way IR35 is administered. The Government has decided to retain IR35 as abolition would put substantial revenue at risk.
The Office of Tax Simplification has released its initial report into what is often called "The Son of IR35".
http://www.hm-treasury.gov.uk/d/ots_small_business_interim_report.pdf
The findings seem to recommend to either scrap IR35 or keep it and police it better. Amendments and the possible merger of PAYE and NIC's are also cited as providing an opportunity to make the taxation of small businesses fairer.
In summary what they say about IR35 is: