Research shows government must act to help freelancers
Survey results by the Professional Contractors Group (PCG) show confidence plummeting among the UK’s freelancers, and highlight the need for the Government to scrap the punitive tax measures it has imposed on them.

Commenting on the research, PCG’s managing director John Brazier said: “These results show a significant drop in freelancers’ confidence about the economic outlook. If it is as serious about assisting small businesses as it claims to be, the Government must act now by abolishing IR35 and giving a firm commitment not to press ahead with its disastrous plans for a Family Business Tax.”

The results of PCG’s annual membership survey show an index of business confidence on numerous key measures, including the overall economic climate and new business opportunities, falling sharply for the year 2008-9.

The top problem facing PCG members remains IR35, the law that tries to tax freelancers like employees and makes it impossible for them to self-assess their tax bills. 65% of members identify it as a problem, and for 40% it is the top problem they face. The proposals for a Family Business Tax on what the government calls “income shifting” is the next biggest threat: 41% of PCG members see it as a problem, while for 21% it is the biggest problem they face.

On a more positive note, the survey showed PCG’s highest ever levels of member satisfaction, with significant improvements on all measures from previous years’ results.

Mr Brazier added: “Times are tough for freelancers, as for everyone. But what these results show is that the biggest problems are the ones created by the Government. To get the economy back on-track and preserve our flexible labour market, the Chancellor must use his Pre-Budget Report to announce that IR35 and the Family Business Tax are to be scrapped.”