The Professional Contractors Group (PCG) has welcomed the Chancellor�s stated goal of world leadership in science and technology, as outlined in the pre-Budget report today.

Commenting on his speech, PCG chairman Dr Simon Juden said, �We share this vision and agree that training and skills development are critical to it; taking new developments out into industry is crucial to keeping UK plc at the cutting technological edge.

�We are disappointed, however, that the Chancellor did not mention the one in seven workers in the UK who are freelance, and who are at the forefront of this dissemination,� he continued. �Those of them who are caught by IR35 cannot even claim against their tax the training required to retain cutting-edge skills � unlike the consultancies with which they compete. We believe that there should be tax breaks for businesses of all sizes that retain employees and train them in new skills.�

Dr Juden also welcomed the idea of a simplified regulatory regime as recommended by the Hampton review. �The reduction of administrative burdens on business and the promotion of more efficient approaches to regulatory inspection and enforcement should be good for small businesses,� he said, �and we look forward to seeing the final report next year.

�We are also pleased about David Varney�s announcement of a small business unit at HM Revenue and Customs,� he continued. �The introduction of a single tax return for small businesses should be the first in a package of initiatives to make compliance easier, and we hope to be able to work with the new unit on this and other measures. One of PCG�s key concerns is that the simplest of businesses have to deal with an extremely complex taxation regime, which remains incompatible with the concept of self-assessment. We are obviously disappointed that the critical issues of IR35 and Section 660A remain unaddressed; notwithstanding, this seems to be a move in the right direction.

�We were also very surprised to see no mention of freelance workers in the discussion of labour-force flexibility,� Dr Juden added. �The UK�s freelancers offer a highly flexible, highly skilled, highly mobile workforce of real macroeconomic benefit to UK plc.�

HM Treasury has today also published a discussion paper entitled �Small companies, the self-employed and the tax system�. �We warmly welcome the recognition of small businesses� role in diffusing new ideas and technology, and are pleased to note the Government�s belief that �small businesses can play a pivotal role in supporting economic objectives� which we share,� said Dr Juden. �We also welcome the approach of taking time to consider these matters properly from a strategic point of view. We strongly agree that the choice of business structure should be driven by commercial rather than tax considerations. As the trade association representing UK freelancers, we look forward to the continuation of this discussion and reiterate our intention to participate at the heart of it, providing a strong positive contribution.�