APSCo voices concern over IR35 changes

Date: 16th March 2011

The UK will see its employment costs rise by millions of pounds if contracting is made less attractive.

That is according to the Association of Professional Staffing Companies (APSCo), following the publication of the Office of Tax Simplification's report on IR35.

Ann Swain, chief executive of the organisation, has lamented the proposal to merge income tax and National Insurance contributions (NICs), saying the move would remove the tax incentive of becoming self-employed.

"Limited company contractors are a vital component of the UK's flexible workforce. Any changes to IR35 that make contracting less attractive would cost UK plc millions in additional employment costs," she said.
"It's rather disjointed that the government is trying the make it easier for businesses to take people on while at the same time it is suggesting making freelance working less attractive, thereby potentially increasing employment costs."

She added that contractors need to be compensated for the fact that they do not receive the same rights as permanent employees.

Posted by Thomas Fletcher