The latest IT Contractor News from Contract Eye

The Professional Contractors Group says that the UK's contractors will be "sorely disappointed" by today's budget speech.

A wasted opportunity

The Group points out that the Chancellor failed to remove any barriers to enterprise in the Budget such as IR35 despite the UK being in the middle of an 'unprecedented financial crisis'

John Brazier, MD of the commented:

"The UK's freelancers will be asking where are the helpful measures such as the repeal of IR35 and other distorting tax laws like s44-7; they will be sorely disappointed again by the lack of answers."

Tax changes for contractors

Corporation Tax for small firms will not be reformed (it remains at 21% for the 2009/10 tax year), and although the new higher rate of income tax (50% for incomes over £150,000 from 2010) may only affect 10% of contractors, many more will be affected by the gradual removal of the personal tax allowance for people earning £100,000 or more.

You can read more about the tax changes announced today in our Budget key changes.

Naming and shaming

The Group says it is concerned at the proposal for HMRC to publish the names of taxpayers who have "deliberately understated" more than £25,000 of tax.

"Will this mean that victims of IR35 investigations will have their reputations smeared by HMRC? Such action would be wholly unnecessary. PCG will be asking for assurances from the Government about this and other plans to strengthen HMRC's arm."

Brazier added: "The UK's freelancers are a vital resource for businesses who are trying to spearhead the recovery, and need to bring new skills on board quickly; their importance will only grow as we climb out of recession."