A record number of people will start their own business this year in the face of rising unemployment, an industry group predicted today.
The Federation of Small Businesses (FSB) said 300,000 people will become their own boss, helping to create new jobs as well as boosting the economy.
The business group voiced concern that workers becoming self-employed might be "pushed" into paying PAYE tax if they were contracted to work for another company for any length of time.
FSB chairman John Walker said: "Unemployment continues to be a worry for everyone, and this year we are expecting more people to become their own boss and go it alone by setting up in business, which will both help the economy grow and tackle unemployment as these businesses flourish.
"However, those who do become self-employed need to beware of the tax man who is penalising these people when they work for other companies, putting them in the PAYE bucket and turning their legal status from self-employed to an employee.
"The FSB is calling on HMRC to respect people's wishes to be self-employed and for the HMRC to cease their tactics in pushing people into the PAYE net."
A HMRC spokesman said: "HMRC does not discriminate between different types of taxpayer and fully respects the right to be regarded as self-employed so long as this is supported by the facts.
"HMRC bases its employment status rulings entirely on the circumstances of each specific case and we do all we can to support business."
