Budget: IR35 is strangling small firms

The Professional Contractors Group (PCG) called on the Chancellor, Gordon Brown, to use the Budget to help small businesses...

The Professional Contractors Group (PCG) called on the Chancellor, Gordon Brown, to use the Budget to help small businesses operate with confidence and remove the climate of uncertainty that is blighting the sector.

Many of our members are closing down their small businesses, and others are contemplating doing so because they cannot continue to operate in a climate where overburdensome regulations and unclear legislation have created uncertainty.

Small companies have been the cornerstone of businesses in the UK for generations, yet this government is presiding over the demise of the small, entrepreneurial venture.

They are finding themselves either strangled with red tape or forced into submission by an uncertain operating climate. The introduction of IR35 has meant that tens of thousands of small businesses in the knowledge-based sector cannot plan for the future or make commercial decisions as they are unsure where the boundaries are.

What small businesses want and deserve from the Government is a business environment where they can develop with a clear understanding of the potential risks and rewards. At the moment, there are so many grey areas that operating a small business is like entering a lottery.

Under the IR35 legislation, small businesses in the knowledge-based sector, particularly IT and engineering, have to assess whether the Inland Revenue will treat them as genuine businesses or "disguised employees" for tax and NI purposes.

This has already forced many small businesses to leave the country or close down and now, many more are finding the lack of clarity makes it impossible to operate.

Jane Akshar is the chair of the Professional Contractors Group, which represents the interests of 14,000 small businesses in the knowledge-based sector.

Read more on IT for small and medium-sized enterprises (SME)

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close