Julie Stewart, Chairman of PCG, the membership organisation for freelancers and independent professionals, has today written to George Osborne to outline how the Budget could be used to help Britain’s smallest businesses.
“Whilst we recognise the success of Government measures in propelling the UK out of the economic downturn, we believe this growth must be cemented by creating a regulatory and tax environment that will better support the UK’s smallest businesses.
“Freelancers have an important role to play in boosting sluggish productivity growth and bridging the UK’s output gap. Research has shown they help create jobs, encourage innovation and generate entrepreneurship in the UK’s economy. Sadly, all too often freelancers and those that engage them are mired in a sea of poor guidance, red tape and badly drafted legislation which stops them from reaching their full potential.”
Among the actions suggested by PCG are further measures to address the issue of late payment through the supply chain. Julie Stewart said:
“Freelancers are often the last to be paid and what’s more, under the current system it is extremely difficult for them to hold clients to account for withholding payment without risking damage to the relationship.
“PCG is sceptical about the effectiveness of the measures currently in place which are only voluntary for big businesses. The Treasury has the power to significantly improve this situation, particularly in the public sector. Freelancers desperately need measures to be put in place that ensure even the smallest businesses are armed with sufficient legal tools to tackle late payment.”
A top priority for the freelancers association is that the proposals regarding ‘Onshore Employment Intermediaries’ will not affect limited company contractors.
“There has been marked uncertainty regarding the reach of the legislation and despite assurances by HMRC, if the legislation is poorly drafted this will produce unnecessary burdens for the UK’s freelance workforce.
“There is a clear need for freelance business to be explicitly excluded from the Government’s plans. Serious consideration should also be given to delaying the implementation of the proposals. This will give businesses the time they need to get to grips with the very serious potential economic impacts of these changes.”
According to PCG, in order to unlock the full potential of independent professionals, access to the very best communications infrastructure at an affordable cost is vitally important.
“I hope that the Chancellor will consider substantially extending the funding for rural broadband, and that he will announce incentives for mobile carriers to extend their support for ‘4G’ technology.
“It is crucial that an improved virtual and physical network remains affordable for the very smallest businesses who do not have access to large capital reserves and expense accounts.”
Consideration should also be given to removing or reducing business rates on collaborative co-working spaces or ‘workhubs’. These premises are increasingly used by the very smallest businesses and they should benefit from reduced rates, says Julie Stewart.
“Incentives for collaborative workspaces would encourage the kind of collaboration and innovation that has made areas such as Old Street and Shoreditch so successful for UK technology and creative firms. These spaces are incubators for our smallest businesses and the Government should do everything it can to ensure more areas of the country can host flexible, collaborative offices and share in this success.”
The most recent figures from Kingston University demonstrate that freelancers contributed £95 billion to business turnover in 2013 while our study of freelancing across Europe have shown it to be the fastest growing sector of the European Labour Market. PCG believes that these measures are an important first step towards supporting the increasingly vital freelance sector.
