Guarantees From Government Needed In Autumn Statement For SMEs

Guarantees From Government Needed In Autumn Statement For SMEs

Ed Molyneux

CEO and Co-Founder at FreeAgent

Views 197

Guarantees From Government Needed In Autumn Statement For SMEs

21.11.2016 09:15 am

I would like to see more guarantees of support for freelancers, contractors and the smallest micro-businesses - those who have traditionally been overlooked by UK chancellors at Budget time. That means less red tape for them to deal with, an easier tax system to navigate and more opportunities to maintain a healthy cash flow and let their businesses thrive.

Late payment, in particular, is a huge issue for freelancers and micro-business owners. The vast majority of them have experienced clients that are chronic late payers, or who don’t pay at all, so I would like to see legislation introduced that specifically targets this problem. Despite the government planning to introduce a small business commissioner in the near future to look into this issue, the reality is that this will likely be a toothless position with severely limited powers. I would like to see the commissioner given the ability to actually penalise late payers with financial penalties - not just to name and shame them."

For contractors, I’d like to see a complete overhaul of IR35 legislation, which has a real, detrimental effect on small 1-2 person businesses and IT contractors who run their business as a limited companies and take short-term contracts. Instead I would replace it with simpler, more robust and fairer rules around small businesses’ employment status.

Finally, it would be good to see some further clarity about the government’s Making Tax Digital plans - especially with regards to the smallest freelance and micro-businesses. Ideally, I would like to see businesses making between £10,000 and the VAT threshold of £83,000 given an additional year to prepare for MTD, and for the turnover threshold for the cash-basis reporting scheme raised to £166,000 - double the VAT threshold - to make digital tax easier for more UK businesses.

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