Category: Employment Law, Taxation and Legislation for Contractors

Too many contractors using umbrella companies are struggling with the UK's complex tax system at the moment, according to an expert, who believes that it needs to be reformed.

Andrew Hubbard, former president of the Chartered Institute of Taxation, said that at the moment small businesses and contractors can spend a lot of time messing around with numbers trying to find the best way of structuring.

"At the small business level, there has been a lot of quite complex rules that have changed year-on-year and it has become a very unstable system as there are lots of anomalies in the system," he stated.

The expert believes that, at the moment, tax management takes up a "disproportionate amount of time" and added that stability needs to be the main goal of any reforms.

Chancellor George Osborne recently stated that the Treasury is planning to create an Office of Tax Simplification to help make the tax process easier for companies to deal with.