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However, for those freelancers and small businesses who are trying to do just that, the reality is very different. Increasingly, they find their business ambitions undermined by a changing and uncertain taxation and regulatory environment.
In recent years, the freelancer community has felt victimised by a string of punitive measures and what appears to be a Government-led campaign to brand certain small businesses as ‘tax cheats’ when they are merely trying, like any other company, to arrange their affairs in accordance with the regulations and legislation of the day.
In recent years, confusion and uncertainty has dominated the sector with measures such as IR35, the ‘disguised employee’ tax; Section660, the business tax on married couples and partners; and most recently, the new dividend tax, which the Government introduced to close what it described as a ‘loophole’, but in fact was an incentive it had introduced 18 months earlier.
More freelancers are finding it impossible to continue operating in this climate. So the reality of the situation is that the Government could find itself ‘killing the goose that lays the golden egg’.
Flexible workforce
The small business sector is essential to the UK economy accounting for over 99 per cent of all businesses. And, in particular, the flexible contractor or freelancer selling his or her knowledge in highly specialist areas is a necessity to keep the UK at the cutting-edge in a competitive global economy.
Large corporations rely on this flexible, specialist workforce, so it is worth examining the benefits freelancers bring to industry and commerce.
For clients, freelancers offer:
- The chance to choose the best person for a particular project
- The ability to buy-in the specific skills required without the need to retrain existing employees;
- ‘Hands-on’ experience from similar projects with other clients;
- An entrepreneurial attitude from someone with the experience of running a business and who has to rely on doing the job well in order to survive;
- Budget control. A freelancer will quote for a particular job on a business-to-business contract without the overheads associated with employing staff;
- No training. Freelancers come ready-equipped with the necessary skills and experience for the task;
- An understanding of corporate life. Many freelancers worked for large organisations before setting up their own businesses and have, therefore, been exposed to working practices on both sides of the fence;
- Exposure to best practise. Freelancers are usually experts in a particular field and pass on their knowledge and experience to in-house staff;
- Independence. As freelancers are not tied to a particular supplier or product range, they can bring independence advice on what is right for the job;
- No internal politics. Because freelancers aren’t part of the larger corporate organisation they are not influenced by wanting to ‘play internal politics’.
In summary, freelancers are a vital resource for large clients and organisations. For decades, if not centuries, the UK has led the world in providing this flexible, dynamic, mobile workforce. Look at any major project anywhere in the world, and chances are there will be a number of technical, highly qualified British contractors working somewhere on it.
The irony is that the main threat to this sector is now coming directly from its own Government with burdensome red tape, over-regulation, unfair taxation and unnecessary uncertainty for those entrepreneurs who are trying to run a small business.
This article was written for Ecademy Resourcing
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Susie Hughes © Shout99.com 2004
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