PAYE umbrella contractors may find themselves being hired by more sole traders if advice from the British Chamber of Commerce (BCC) is heeded by the government.

The BCC has urged the coalition to assist sole traders to flourish by exempting them from certain aspects of employment legislation.  The BCC’s research identified the latter as a major obstacle to growth for sole traders, who resist getting much-needed support from umbrella companies or from hiring additional staff because of the legal obligations they then face.  These include pension requirements, dismissal rules, and payment during sickness absences.

The number of people who have become sole traders has risen to 3.6 million over the last seven years, the BCC study reveals.Whereas some remain content to operate as they are, a proportion of them would like to grow but feel deterred from doing so by the UK’s employment legislation.  Dr Adam Marshall, the BCC’s Director of Policy, has urged the government to encourage these traders to grow by exempting them from such onerous obligations if it really wants to see employment expand.

Small companies, too, feel constrained by the burdens of red tape, according to research from small business workspace provider Basepoint.  A survey of Basepoint licensees from the Midlands and the South showed that 42 per cent believe the government should do more to cut red tape, which is choking expansion amongst smaller firms.  According to Basepoint’s Executive Director, Brian Andrews, the government must understand that small businesses cannot grow during an economically difficult time until unnecessary and out-dated red tape is abolished.

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