Freelancers condemn Family Business Tax plans and HMRC consultation process
Freelancers condemn Family Business Tax plans and HMRC consultation process

The Professional Contractors Group (PCG), which represents the UK’s freelancers, has today submitted its formal response to the Government’s plans for a Family Business Tax on “income shifting”, in which it condemned the proposals as “conceptually retarded”.

“The Government’s plans rest on fundamental misunderstandings of basic business concepts such as profit, income and risk,” commented PCG’s managing director John Brazier.

“They are trying to claim that any profits from a business must be taxed as the personal income of the individual within that business whose labour generated them: this is plainly absurd, and seems to be trying to say that hundreds of thousands of businesses are not businesses at all, but just individuals who should be treated as earning salaries.”

 

PCG’s response also criticises the proposals for being unworkable, and placing a disproportionate burden on family businesses, who will face a mountain of red tape simply to prove that they have complied with the legislation – irrespective of whether or not they actually owe any extra tax under it.

“We really hope the Government will see sense and reconsider its plans,” summarised Mr Brazier. “Business bodies, tax experts, the thousands of people who’ve signed the e-petition and the MPs from all parties who’ve signed the Early Day Motion are all sending the Government a clear message that these proposals are not fair and will not work.”

PCG has also written to John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, asking him to instruct the Better Regulation Executive to look into the conduct of the consultation.

“It has been clear from the start that the Government decided to legislate on the basis of no evidence whatsoever,” commented Mr Brazier. “Throughout the consultation, they have refused to discuss the principle of the legislation, even though their draft Impact Assessment admitted that they could not accurately quantify the problem they wanted to address – or even confirm that there was a problem at all.”

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