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Freelancers would benefit from tax overhaul

freelancesupermarket.com newsroom

RSS 12 June 2010
In order to secure the UK’s future, the tax law process that affects freelancers needs to be drastically overhauled. That’s the message that Vincent Oratore, the president of the CIoT is sending to the coalition.

He pointed out that the way we make the tax laws in this country is deeply flawed. They are not scrutinised properly by experts and there is never enough parliamentary time to properly consider the effects of any changes.

Oratore would like to see a less complex tax system for contractors that provided a degree of certainty. This is even more important, he said, when the economic cycle is under pressure.

His ideas are based on the US model. There they have a Congress' Joint Committee on Taxation which is made up of representatives from both the lower and upper house. This committee is also supported by tax professionals.

If a similar idea was adopted in the UK, the committee would consist of MPs and members of the House of Lords, again supported by tax industry experts.

The Tax Faculty also has some advice for the Chancellor. It has written to him expressing its desire to take part in the upcoming small business review and laying out some detailed policy recommendations.

The letter points out that the key to balancing the UK's books lies with economic growth and for the government to achieve this they should be supporting the private sector and providing a competitive taxation system. As such it would like to participate in the work of the proposed Tax Simplification and Budget Responsibility Offices in addition to contributing to the small business taxation review.

The Institute of Chartered Accountants in England and Wales agrees that our current tax system needs simplification.

The ICAEW is advising the chancellor not to make any immediate major changes to CGT, but it thinks more attractive rates could be offered to established entrepreneurs. The institute allows agrees with the CIoT's view that more detailed consultations should take place before large-scale tax reforms are introduced.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: White, Gray and Blacks by Hamed Saber

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