By Lisa Burroughes, 28 May 1999 15:14
NEWS The UK government has been accused of passing controversial legislation - which will affect one-man service companies - through the back door. The proposed legislation was tacked on to a disability bill under the Welfare and Pensions Bill last week. If it is approved by the House of Lords, IT consultants who essentially declare themselves as self-employed and pay themselves a wage - while effectively being employed by another company - will be subject to employee rates of PAYE (pay-as-you-earn) and National Insurance. The Professional Contractors Group (PCG) is lobbying the government to amend the bill before it comes into effect in next year's budget. A spokesman for the PCG said: "This is a very difficult bill to phrase but at the moment the government has caught everyone under their definitions rather than the few who use the existing law as a loophole to avoid tax. This will mean that big companies will be forced to go offshore for their contractual requirements and it spells the end of the entrepreneurial flexibility that exists in the UK workforce at the moment." A second reading is due to go through the House of Lords on 10 June. In the meantime PCG and the BCS will meet with the Inland Revenue to discuss the implications of the rules and how it could be altered.
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