The following sad story appeared in the Daily Mail of 21 May 2001:
“When offered contract work, my firm went through the costings, cashflow and forecasting exercise. We judged there would be a fair return on the investment and decided to go ahead. However, the figures starting going through my mind and the following emerged : net profit to the firm — £18,598; net profit to the government — £24,767.
Why?With National Insurance, PAYE, VAT, fuel tax, insurance tax, land fill levy, road fund licences, operators’ licence, personal tax liabilities, loss of interest on cash flow and other hidden taxes, the government will gain more from this investment than the company. In addition, ifwe took on three employees for this new job and they came off benefits, it would save the government another £23,400 a year, leaving the government a gain of more than £48,167 in the first year — 259% more than the risk-taker.
Why should I risk everything for a government that has accepted contract prices 30% lower than last year? Continue reading