Feeds

IR35 ‘causes significant damage’ – MPs

Review urged

  • alert
  • submit to reddit

Top three mobile application threats

The Government has been urged to immediately review the controversial IR35 tax or face the wrath of the nation’s freelancers when it came to election time.

An influential group of MPs from all political parties have told the government the tax is not benefiting anyone and is causing significant damage to the UK’s army of freelance workers.

The All Party Parliamentary Small Business Group (APPSBG) said the government should instead carry out a detailed review of IR35 to ensure the costs in terms of impact on the freelance market were justified by the benefits in terms of the taxation impact.

Under IR35, which was introduced in April 2002, self-employed contact workers are treated as employees for tax and National Insurance contributions and it is designed to stop those who are members of staff in everything but name paying less to the government.

But APPSBG said there was little real evidence that IR35 has proved cost effective in terms dealing with tax avoidance without also impacting genuine businesses.

APPSBG warned the tax was driving contractors overseas because of the extra burden it was placing on their business.

And the APPSBG’s report said freelancers were questioning the government’s commitment to entrepreneurs as it appeared to them that legislation such as the IR35 actively hindered and discouraged freelancers from developing.

“Several respondents commented that they would have never been able to grow their present businesses if IR35 had been in force when they were freelancing,” it read.

The report also claimed there was potentially a large market for freelancers amongst small businesses provided they were not discouraged by real or perceived legislation.

“The shift in emphasis of legislation towards treating a freelance used on a regular basis is a concern for us as such changes are making it less appealing for small businesses to use freelancers and may limit future opportunities for independent working,” one respondent commented.

© Startups.co.uk is the biggest independent small business site in the UK. It has more than 2500 articles covering everything from taking on staff to dealing with VAT.

Top three mobile application threats

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
Intel sees 'signs of improvement in the PC business' but earnings remain 'Meh...'
Prospects for the future, however, please Wall Street money men
What's a right pain in the ASCII for IBM? Its own leech-like hardware biz
Keep your eyes on our cloud while we remove this pesky thing, say execs
Oracle's Larry Ellison has the MOST MASSIVE PACKAGE IN PUBLIC
Billionaire IT baron earns twice as much as the next in line, Disney chief Bob Iger
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.