Finance Bill — Provision of services through intermediary — 3 May 2000

Clause 31 ordered to stand part of the Bill .

Question proposed , That the clause stand part of the Bill.

A new Labour Government will give Britain's entrepreneurs and small businesses the backing they deserve.

The Government is creating a brain drain like the one that happened in the 60s. Software is a peculiar thing which has produced a good income for Britain and lots of spin-offs but lots of other countries like Germany are not very good at it.

and so take trade away from Britain, in addition to the tax loss from losing high-income experts.

is ashamed to say that I voted for this business hostile Government . . . I have no wish to remain in a country that punishes enterprise instead of encouraging it. My company turned down six months' further work in the UK implementing e-commerce systems for our major telecommunications company, entirely because of IR35.

I spent three months and about £50,000 of my company money to try to develop a marketable item of hardware. IR35 will stop this kind of enterprise. Under the new rules, I could not afford to work here. My outgoings in travel and living costs will be swallowed up in two months under the 5pc ruling for expenses.

The processing time for work permit renewals is to be slashed by up to three months following the introduction of a new renewal system . . . by the Education and Employment Secretary David Blunkett. The move, together with new measures arising from the work permit review, will particularly help IT employers to address skills shortages.

The modernisation measures include: a fast-track work permit route for employers in recognised shortage sectors, such as IT.

Examples of occupations on the fast-track applications route are included in Annex A.

We are listening to the needs of employers, and we are giving them what they need.

pouring weedkiller on the seed-bed of enterprise.

Now, they have finally driven me away--

It was totally as a result of IR35 and the uncertainty. I object to being taxed at 52 per cent. and being called a tax cheat. I cannot save any money in my company for the times when I don't get work

and the 5 per cent. expenses allowance doesn't go anywhere near to covering the cost of hardware, training, accounting and legal expenses.

For the purposes of this Schedule a man and a woman living together as husband and wife are treated as if they were married to each other.

IR35 will cause the biggest brain drain since the 1970s when Labour taxed the rich until the pips squeak. Because of the large scale emigration, the estimates of extra tax revenue will also be wrong. The amount of tax my business and I paid last year was enough to finance a couple of Minister's salaries with some change left over for servicing a Jaguar. This year the amount of tax I pay will be nil.

We have no British car industry left due to old Labour. Tomorrow there is a danger we will have no British e-commerce industry left either, due to new Labour.

most complexities come about when politicians depart from the objective of raising enough revenue to cope with their spending and insert measures that have nothing to do with raising revenue but everything to do with trying to engineer social change. All the evidence suggests that tax systems are spectacularly unsuccessful at doing this. However, that does not deter politicians from trying.

Originally the proposals aimed to set up a system whereby people who are really employees couldn't pretend that they were contractors and walk out of the PAYE system, but you had to protect genuine contractors who really are in business. And what we are trying to do here--

is protect genuine contractors.

The optimum salary to draw this year is £4,335, which covers your personal allowance . . . I know a lot of readers will be worried about the minimum wage. Although this does not apply to company directors . . . it is highly unlikely that any contractor will be served with a notification.

Beg, borrow and steal to avoid paying higher rate tax this year. Next year you will not be able to avoid it. You should recognise your company for what it is, a tax haven.

Although there are many honourable exceptions, the majority of--

were cynically taking the rest of us for a ride . . . They should admit defeat gracefully and be grateful for all the years in which they got away with their rip off on society. The Government is to be congratulated for making them contribute their fair share towards the funding of our hard-pressed public services. [Interruption.]

Although many of the contractors questioned said they intended to look for work overseas, the feeling is that this is an expression of contractors' defiant anger rather than a true intention to migrate.

I cannot believe the tax advantages of working in Germany or Holland are going to be enough to justify uprooting and moving abroad.

I find it laughable when people who have been using the veil of incorporation to hide what is fundamentally the relationship which would otherwise exist between an employer and an employee, claim that it is somehow going to harm British business. It is not--it's going to harm their pockets.

Question put, That the clause stand part of the Bill:--

The Committee divided: Ayes 252, Noes 147.

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