A strong pedigree
PCG was formed in May 1999 to provide independent contractors and consultants with a representative voice in opposition to the original IR35 proposals. Since then, we have evolved from being a single-issue campaign group to being a fully fledged, not-for-profit professional body representing knowledge workers who choose to be self-employed.
We have had some notable successes over the years:
1485 wins, 8 losses
PCG’s continued support of members who are being investigated by the tax authorities has resulted in 1,485 cases being won by PCG’s expert advisers versus only eight won by HMRC, and one case withdrawn by the member concerned.
Family Business Tax kept at bay
PCG campaigned hard against the Family Business Tax proposals, or “income shifting” legislation as the Government tried to call it. In 2008 the proposals were deferred as the Government had to admit it was not workable. This saved hundreds of thousands of family businesses from having to pay thousands in extra, unfair tax.
Government accepts PCG’s view on expenses policies
In 2008 the Government consulted on possible legislation around the expenses policies deployed by umbrella companies and agencies. PCG argued strongly that the existing rules should instead be enforced properly – a view that the Government accepted as it confirmed it would not be legislating.
Preventing UK professionals being undercut by imported workers
In the early 2000s, large client organisations continued to undercut UK professionals by importing IT workers from overseas, on the basis that there was a “skills shortage” in IT. PCG demonstrated that this was not the case, and had all IT disciplines cleared from the skills shortage list. The market was only just approaching its old levels when the latest downturn struck; PCG was again instrumental in keeping most disciplines exercised by freelancers off the skills shortage list.
Victory in the House of Lords!When the Government attempted to impose a retrospective and punitive reinterpretation of tax law on UK businesses, PCG supported Geoff and Diana Jones of Arctic Systems Ltd all the way to the House of Lords, and succeeded in having the reinterpretation thrown out by the courts in 2007.
Cabinet Office re-writes official guidance on security clearanceIn 2007 PCG secured re-written official guidance from the Cabinet Office, stating clearly that public sector end-clients should not insist on pre-existing security clearance for work on client sites, in light of a substantial body of evidence amassed by PCG members about this damaging practice.
Potentially harmful legislation at EU level avertedIn 2006 the European Commission published a Green Paper on Labour Law which demonstrated a deeply poor understanding of freelancing and could well have led to harmful new legislation. PCG campaigned in Brussels with other UK business organisations and the Green Paper was subsequently taken no further by the EU.
Unique victory in Brussels over patents directiveA long-running EU proposal threatened to make software patentable; this would have made software development impossible for most independent contractors who did not have access to patent portfolios to trade with. PCG was the only UK organisation to campaign against this proposal in Brussels in 2005 and the directive was rejected at Second Reading by the European Parliament – the only time this has ever happened.
PCG helps prevent attempts to side-step the skills shortage lists
PCG was heavily involved with the development of the points-based system for managing migration. The original Command Paper issued by the Government proposed making Intra-Company Transfers (ICTs) – the permits used by off-shoring companies to sidestep the skills shortage lists – automatic guarantees of entry to the UK. PCG argued against this and when the new system went live an ICT needed additional points from other criteria before entry to the UK was granted.
PCG members out of scope of MSC rulesThe Government’s decision in 2006 to clamp down on the tax advantage offered by “managed service companies” (“composite companies”) created a danger of contractors who use limited companies being caught by the measure accidentally. PCG worked closely with the Government to secure a tight definition that did not catch non-MSC freelancers.
Government retains workable Allowed Mileage Allowance Payments systemWhen the Government consulted on re-designing the AMAPs system, PCG argued that the existing regime was workable and generally-understood, and should be retained. The Government’s final decision was indeed to retain it.
HMRC’s powers restricted to appropriate levelsHM Revenue & Customs originally sought powers stronger than those enjoyed by the police, namely the ability to act when an offence “is being, or is about to be” committed. PCG successfully campaigned against the proposals and HMRC is rightly restricted to acting when an offence “has been” committed. In addition HMRC dropped plans for “direct attachment”, in other words the ability to take money directly from taxpayers’ bank accounts. PCG is pushing hard for extra safeguards to be installed for taxpayers.
Protection from IR35PCG has protected its members from IR35 wherever possible. The measure was taken to judicial review and a subsequent case strategy has established as much clarity in case law as is possible. Thanks to the expert advice and insurance offered by PCG, freelancers who are not PCG members are more than twice as likely to pay extra tax under IR35 than those who are!
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