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Freelancers – have I got news for you (and it’s not good)

17 Jul

It feels like tax, and specifically tax avoidance, has been making the headlines almost daily over the past few months, and it has offered a rare opportunity for MPs to agree with each other. They were queuing up to voice their disgust after the Ed Lester case, and did so again, with varying degrees of success (I’m looking at you David Cameron) after the Jimmy Carr scandal. Now, following various stories regarding the pay and tax arrangements of some of its presenters, the BBC has found itself to be the latest focus of the collective ministerial ire.

Andrew Chamberlain, PCG’s Senior Public Affairs Advisor

Here was an opportunity to score some easy points, a rare open goal of public opinion that few managed to resist. However, while watching them stand one after the other in Parliament and voice their outrage, it occurred to me that they might do well to remember that hitting the bullseye doesn’t get you any points when you are aiming at the wrong target altogether.

The truth is, most freelancers that use a limited company do so because it represents best value to their engager. The BBC admitted via a recent article in the Guardian that they stipulate “all freelancers earning over £10,000 must operate as a limited company” and they are far from alone. It is common practice for agencies and engagers in both the public and private sector to insist freelancers and contractors are paid through limited companies for various reasons.

To be fair to Danny Alexander, Margaret Hodge and the rest, the taxation system for freelancers and independent professionals is almost as difficult to understand as it is to work with. It isn’t surprising that they make inaccurate statements such as “these people are operating off-payroll when they should be employees”. The BBC has not helped the situation if reports of a whistle blower claiming he or she was presented with the choice between receiving payment via a limited company or taking a substantial pay cut are true.

If accurate, this sounds like a straightforward attempt by the BBC to reduce its tax bills and perhaps its obligations as an employer too. Where an engagement has been artificially constructed solely to reduce tax bills the Government are right to investigate that arrangement and where appropriate put a stop to it. However the exposure of what appears to be an (albeit ill advised) attempt by the BBC to save money does not alter the fact that the model itself is undeniably the most appropriate for broadcasting.  In a world where frequently changing personnel is key to maintaining a fresh output and appeal, the use of freelancers is absolutely the right approach. In terms of quality of output and value to the licence fee payer, the BBC has got it right.

The Government must also be mindful that in certain industries using freelancers is quite simply the most appropriate method of finding the talented personnel needed for individual projects.  It is no surprise therefore that the biggest broadcaster in the UK makes use of the UK’s world-leading flexible labour market. Our message to the Government is therefore simple. We hate to see tax avoidance just as much as you do, but don’t punish legitimate freelancers and their engagers in your haste to stamp it out. The BBC, and the UK, needs them.

By Andrew Chamberlain, PCG’s Senior Public Affairs Adviser

Stop fighting mythical dragons George and let small businesses roar

29 Mar

In the run up to the budget on the 21st March, I called on the Chancellor to come out fighting for the UK’s smallest businesses, a sector that contributes £82 billion to the UK economy annually – freelancing. As the dust settles on the Budget, how well did the Chancellor do?

John Brazier, PCG’s Managing Director

Whilst welcoming the rise in the personal allowance, the Budget contained little to significantly help the UK’s 1.6 million freelance businesses.  Specifically, the Government did not further clarify IR35 and a new consultation raises deep concerns over the future of interims and some freelancers operating within the public and private sectors. Continue reading

A plea to freelancers everywhere..

16 Nov

Iain McIlwee, PCG's Head of Commercial Development

OK. So here’s the challenge. I want every UK Freelancer, contractor, interim, independent professional etc to have a chance to benefit from www.nationalfreelancersday.org.uk (23rd November 2011)… and now less than a week to do it.

NFD is all about Freelancing, a chance to highlight the value and contribution of the UK Freelance Sector, 1 in 20 in the workforce, 1.4 million people who are fundamental, key, vital, cruical, really really important etc. to the economy in the UK and our prospects of recovery. Continue reading

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