For many freelancers – around 60% according to our own research – a limited company is a legitimate way to limit your personal liability, operate more tax-efficiently and make yourself more attractive to prospective employers. However, the recent controversy surrounding the inappropriate use of personal service companies by high-level public sector employees has threatened to undermine their legitimate use, and raised worries about a freelancer and contractor witch-hunt.
The scandal began with Student Loans Chief Executive Ed Lester, and it has since been revealed similar tax-dodging setups have been used by staff at the Department of Health and even at HMRC. Due to the enthusiasm of some newspapers to “name and shame” those operating a single-person limited company, many freelancers and contractors have begun to fear this mis-information may harm their job prospects.
In response the PCG has launched a four-week advertising blitz, timed for the run-up to the Government’s 2012 Budget, promoting the freelance sector and the legitimate use of one-person limited companies. The PCG says the campaign “will seek to redress the balance, and remind readers of the vital and productive role freelancers, contractors and interims play in both public and private sectors.”
The ads will be running in national newspapers and magazines, and will be seen by an estimated 4 million people before George Osborne announces his latest raft of changes. The PCG’s John Brazier said of the campaign:
“Distrust created by the Ed Lester case has impacted on the hundreds of genuine freelance, interim and contractor businesses who are working to benefit companies and organisations in both the public and private sectors. These are talent driven businesses often providing specialist expertise not available in-house.
“Used correctly these companies can not only save government and private businesses money, but help them solve short-term crisis with their input. It’s not right that these businesses potentially face unwarranted attacks or loss of contracts.”
Photo by Dominic Alves