July 29, 2010
Entrepreneurial Brits will launch news businesses by the droves this year and tackle the rising problems of unemployment, the Federation of Small Businesses (FSB) has predicted.
FSB research claims that 300,000 people will become their own boss over the next 12 months, boosting the nation’s flagging economy while providing for a steadily declining job market.
However, the business group has expressed concerns over workers becoming self-employed and suffering under Pay As You Earn (PAYE) tax if contracted by other companies.
"Unemployment continues to be a worry for everyone, and this year we are expecting more people to become their own boss and go it alone by setting up in business, which will both help the economy grow and tackle unemployment as these businesses flourish,” commented FSB Chairman John Walker.
"Those who do become self-employed need to beware of the tax man who is penalising these people when they work for other companies, putting them in the PAYE bucket and turning their legal status from self-employed to an employee.”
The FSB has called on HM Revenue amp; Customs (HMRC) to “respect people’s wishes to be self-employed” and cease their “tactics” of pushing entrepreneurs into the “PAYE net”.
In response, the HMRC claims it “does not discriminate between different types of taxpayer” while fully respecting the rights of those who chose to pick their own working hours and run their own companies.
“HMRC bases its employment status rulings entirely on the circumstance of each specific case and we do all we can to support businesses,” a HMRC spokesman added.
Launching your own business during the current economic climate could prove fruitful, but being aware of the financial dangers is essential.
If you’re hoping to become an entrepreneur in the near future, seek advice before doing so and make sure your business has enough steam to get off the ground and stay afloat.
