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Contractor group slams income shifting proposals as "conceptually retarded"

Published on Feb 26, 2008 |

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The Professional Contractors Group has submitted its formal response to the Government's income shifting proposals (a.k.a. the "Family Business Tax").

Unsurprisingly, given the strength of feeling against this latest anti-enterprise measure, the PCG condemned the proposals as "conceptually retarded".

The PCG's MD, John Brazier, said:

"The Government's plans rest on fundamental misunderstandings of basic business concepts such as profit, income and risk,"

"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."

The 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."