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Chancellor under fire for IR591 tax terror

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MPs and pressure groups have roundly condemned the Chancellor for his refusal to consult with UK firms over plans to introduce a controversial and potentially punitive tax regime for owner managers of small-incorporated businesses in his impending 2003 Pre-Budget Report.

The tax, dubbed IR591 by the Professional Contractors Group (PCG), was the subject yesterday in Westminster of a second early day motion, this time sponsored by Brian Cotter MP.

Cotter's motion calls for MPs to urge the Chancellor to be open and to publish further details of his plans to "ensure that the right amount of tax is paid by owner managers of small incorporated businesses".

In addition it presses the Government to introduce a proper period of consultation prior to any new legislation being unveiled and demands that the Chancellor introduces a "fair and transparent system of taxation" for small businesses.

The motion slams the Chancellor's "excessive tinkering that has created an impenetrable maze of taxation law which most small businesses struggle to comprehend".

Ian Durrant, PCG's director of external affairs, said it is disingenuous for the Treasury to portray IR591 as an anti-tax avoidance measures, when it will in fact "constitute tax increases for almost every owner-managed incorporated business in the UK".

Durrant urged freelancers and small business owners to lobby their respective Members of Parliament to oppose IR591 before Budget day on 17 March.

"There are around 3.8 million small businesses in the UK, generating 52 per cent of the country's total turnover, and employing 12.6 million people. We believe that a large proportion of them could be adversely affected by these proposals," he said.

PCG has set up a dedicated website outlining the danger of IR591 to IT contractors and small businesses, which can be found here. ®

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Chancellor under fire for IR591 tax terror

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