Feeds

IR35 ‘causes significant damage’ – MPs

Review urged

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

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.

Secure remote control for conventional and virtual desktops

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
'Internet Freedom Panel' to keep web overlord ICANN out of Russian hands – new proposal
Come back with our internet! cries Republican drawing up bill
What a Mesa: Apple vows to re-use titsup GT sapphire glass plant
Commits to American manufacturing ... of secret tech
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
10 threats to successful enterprise endpoint backup
10 threats to a successful backup including issues with BYOD, slow backups and ineffective security.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.