Rein in anti-limited company rhetoric, MPs told

MPs are receiving written requests to rein in the rhetoric against workers who are limited companies, ahead of the final chance before the Budget to reform the rule that was meant to stop the set-up from solely being adopted to avoid tax.

The Freelancer and Contractor Services Association says its letters to approximately 90 MPs ask them to tone down the “strong” rhetoric against personal service companies, just as the IR35 Forum concludes how a new system for IR35 should operate.

FCSA chair Stuart Davis alluded to concern that recommendations from the forum, which meets later today to finalise IR35’s overhaul in April, may be coloured by the ongoing outcry about limited company working.

Without comments on the issue being “well thought-out and properly considered”, he fears that genuinely self-employed contractors could be stigmatised, for wrongly being perceived as ‘tax dodgers’.

FCSA member firm Brookson, an accountant with 8,000 self-employed clients, explained:”Sadly, much of this discussion has taken the tired route of making generalisations about the flexible workforce.

“To view this sector as one and the same, as a means to somehow ‘dodge tax’ is unrepresentative and dangerous especially when it is one of the few growth areas of the UK economy.”

The association agreed: “We would like to remind the government and those who are criticising these employment arrangements, that freelance contracting work is undertaken by thousands of workers up and down the UK and is a legitimate and valuable way of working”.

The defence of limited companies came first from freelance trade body PCG which, through interviews with mainstream media and even submissions about their reportage to ‘Letters to the Editor’, is calling for the “witch-hunt” to stop.

At the FCSA, Mr Davis echoed: “There is nothing wrong or inappropriate for any employer, including the government to employ contractors at any level of the civil service, if done properly, for the right reasons and where those concerned pay appropriate taxes.”

The “key issue” is compliance, he said, achievable where “all stakeholders in the supply chain are responsible for engaging [workers who are limited companies] correctly and appropriately.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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