News | Published March 30 2020

Marsworth Computing boss says HMRC tightening control affects UK "entrepreneurial spirit"

On the back of the Chancellor's announcement of the comprehensive package to support the self-employed yesterday, Martin Simmons, Director of London-based Marsworth Computing, has spoken with The Parliamentary Review about what he believes is a systemic problem.

Chancellor Rishi Sunak's package included a taxable grant to the self-employed and people in partnerships, worth 80 per cent of average monthly profits over the past three years, up to £2,500 a month.

The Coronavirus Self-employment Income Support Scheme will be rolled out from the beginning of June, and the scheme will be open to those claimants who are "majority self-employed".

The scheme was the latest in a part of comprehensive financial measures to support the British economy, but the director of one SME has voiced his concerns about circumstances surrounding the package.

Director Martin Simmons of Marsworth Computing told The Parliamentary Review that HMRC have spent "much time and effort 'persuading' freelancers' to form limited companies or become fully employed and enrol on PAYE", which would mean this support package was less of a blow to the government's coffers.

"From HMRC's view," Martin said. "They will get more income tax and NI when staff are safely controlled by PAYE. From the employers' view, they will save on employer's NI if their freelance staff have set up limited companies.

"Self-employed people may save on employee NI and income tax if they take the majority of their income as dividends but they have no holiday pay, no pay if sick, no pay if no work and reduced employment rights, which saves on benefit costs for the Treasury.

"So the government is slowly tightening the noose around free enterprise, as it is today's self-employed that will provide the new companies of tomorrow. 

"Thirty years ago, I left the security of a well-paid job and became a freelance computer consultant. Some years were good, some were bad, but the freedom was there to allow me to establish a business core. My company now employs 16 staff and contributes over £250,000  in various taxes every year.

"From the country's point of view, this is the entrepreneurial spirit that is slowly being strangled by HMRC insisting on tighter and tighter control. Simply put, the combination of HMRC's new stance on the self-employed and the Covid-19 outbreak is lethal for freelancers."

You can read Marsworth Computing's Parliamentary Review article here.

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The Parliamentary Review

March 30 2020

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