Should individuals, contractors, small companies, corporations all pay a fair amount of tax? Yes of course, but that’s not possible to enforce with the hideously complicated tax system and the inability of all countries to react to modern global business practices. There was a program on this week about how the rich avoid takes – it showed how much more complicated the tax rules have become – the UK are the most complicated in the world and the documentation is 3/4 the size of the Encyclopaedia Britannica!
So whilst I do not have an issue with small businesses and contractors paying what is fair what I do have an issue with is that the government takes easy pickings whilst leaving those corporations with large legal and tax departments to carry on regardless. It’s not a level playing field at the moment and the new dividend tax will make it worse.
2 years ago I set up my own consultancy business, for now it’s just me but I have plans to grow it in to a proper business, I am not a contractor, or in IT, but some parts of what I do have some relation to contracting so I occasional go on contractor.co.uk and the selfish mercenary attitudes of many on there is very telling and re-enforces what many above believe. The funny thing is that it is usually big businesses who benefit from this again as they no longer need to burden of having people of the pay roll.
I think a scheme for individual contractors / freelancers such as used in Germany is not a bad idea to help different them from proper small companies with employees and growth plans but the government should be concentrating on the corporations first.