Thurs, 22 March 2012

Derek Kelly, managing director of Parasol Group, which includes Parasol, ClearSky Accounting and Silverline, says there are “plenty of positives” to take for contractors, freelancers and temps, as well as the staffing businesses that place them.

“A lot of flexible workers work in the leading industrial sectors listed by the Chancellor, ie. aerospace, pharma, oil & gas, and the creative and media sectors. These individuals will get a boost from planned investment, as will the staffing businesses that place them.

“Of more significance for flexible workers working via their own limited company is the cut in tax rates to 20% for small businesses. This was essential for keeping one of the UK’s major sources of innovation competitive and a viable and valuable resource for UK plc.

“I do have one concern, and that is the Chancellor mentioned that he will consult on a general anti-tax avoidance rule. He used fairly emotive language in describing tax avoidance as ‘morally repugnant’ but it is important to note that tax avoidance is not illegal.”

Stuart Davis, chairman of the Freelancer and Contractor Services Association (FCSA), says: “Although while overall we think the Budget will help to stimulate the economy, once again the government has missed another opportunity to stimulate the critical flexible workforce made up of freelancers and contractors.

“We give a cautious welcome to Treasury’s plans to introduce a new cash basis for calculating tax for small unincorporated businesses. We await the consultation but if implemented correctly this could be extremely helpful to reduce the administrative benefits for freelancers and contractors.

“We are, however, very concerned at the government’s plans to require office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs [National Insurance Contributions] deducted at source by the organisation by which they are engaged.

“We believe this is the government’s attempt to try to prevent senior civil servants from legitimately working as freelancers and contractors, as recently highlighted in the media.”