The UK could be forced to employ foreign ITers to replace those forced out by the IR35 legislation, thereby following in the footsteps of Germany, according to Alan Duncan MP, shadow technology minister.
Germany is to invite 30,000 foreign computer specialists to work there so it can boost its Internet competitiveness. It is attempting to address its chronic skills shortage in information and telecommunications technology. At least 75,000 experts are said to be needed in research and development.
German Chancellor Gerhard Schroder plans to hire ITers in Eastern Europe and India. Legal restrictions on employing non-European Union workers will be lifted and companies would be free to search for staff.
Duncan said, "At present Britain is well placed against its rivals in the huge growth market of e-commerce. Unlike Germany we have the skilled people needed to embrace the internet revolution. But Labour is threatening this with their proposed IR35 e-tax."
He believes the IR35 proposals could see a massive brain drain, with 30,000 knowledge-based workers being forced to close their businesses or move abroad.
It's only a matter of time before the UK is forced into the same situation. "When this tax comes into force we will be in the ludicrous situation of having to invite foreign specialists to replace those forced out by Labour's stealth tax on enterprise."