Mark Prisk, the shadow business minister, told the Daily Telegraph that the Conservatives could allow the 600,000 people who operate as 'one-man' firms to follow the tax rules applied to the self-employed.
Before the IR35 was introduced in 1999, contractors could work for their clients through their own limited companies and minimise income tax and national insurance contributions (NICS) by paying themselves low wages and taking large dividends.
However, firms of this nature now have to pay NICS of 11 per cent, rather than the £2.40 a week applied to those who are classed as self-employed. The Tories are considering changing this, to allow them pay the same as self-employed workers.
Mr Prisk told the newspaper: 'The current government has treated the self-employed disgracefully. More often than not they have treated them as if they are on the fiddle, which is wholly unacceptable. We want to reform the system.'
A recent poll by the British Chambers of Commerce found that 13 per cent of firms think the government's main focus should be making their UK's tax system more competitive.
Before the IR35 was introduced in 1999, contractors could work for their clients through their own limited companies and minimise income tax and national insurance contributions (NICS) by paying themselves low wages and taking large dividends.
However, firms of this nature now have to pay NICS of 11 per cent, rather than the £2.40 a week applied to those who are classed as self-employed. The Tories are considering changing this, to allow them pay the same as self-employed workers.
Mr Prisk told the newspaper: 'The current government has treated the self-employed disgracefully. More often than not they have treated them as if they are on the fiddle, which is wholly unacceptable. We want to reform the system.'
A recent poll by the British Chambers of Commerce found that 13 per cent of firms think the government's main focus should be making their UK's tax system more competitive.
