The Professional Contractors Group yesterday announced it is taking the government to court again to challenge a previous decision over the legality of the controversial IR35 tax law.

Under IR35, contract workers will no longer be able to pay less tax on the grounds that they do not receive company benefits.

The PCG's High Court defeat after the Budget in April this year carried with it an underlying victory. The judge, Mr Justice Burton, ruled that the basis of IR35 was legal but branded the guidelines that accompanied its implementation complex and misleading and ordered their alteration.

Justice Burton said the guidelines did not successfully explain whether a contractor fell under an employed or self-employed category.

"The court found in the PCG's favour on so many factual issues that we felt it was only a small step to prove that not only is this law unfair and uncompetitive, it is also illegal," said Jane Akshar, Professional Contractors Group chairman.

The appeal, on the grounds that IR35 contravenes European legislation relating to state aid and freedom of movement, will be heard from 4 to 6 December.