SHARES in FreeAgent Holdings have fallen nine per cent after a trading update which indicated that changes to the tax system are impacting on the accounting software specialist.
Edinburgh-based FreeAgent said it expects to report sales of £4.6 million and an underlying loss of £0.4m for the six months to September, broadly in line with expectations.
Chief executive Ed Molyneux said the company had achieved strong revenue growth with an evolving mix of routes to market. It targets the micro-business sector.
He noted: “Practice sales growth was tempered following changes to IR35 ‘off-payroll’ legislation affecting public sector contractors.”
Changes introduced in April have led public bodies to treat more contractors as employees for tax purposes.
In its annual results statement in June the company said: “Notwithstanding the Government’s recent reforms to the tax treatment for self-employed contractors on public sector projects, we continue to see our greatest success in the contractor focused practice market.”
Mr Molyneux noted yesterday the company has enjoyed continued growth in sales made directly to customers rather than through third parties such as accountants.
FreeAgent has made progress in its relationship with Royal Bank of Scotland. In January RBS said it would offer Freeagent’s software to small business customers of the group.
FreeAgent said gross profit margin remained strong in the first half at 80 per cent.
Shares in the Aim-listed company closed down 8.5p at 82p.
House broker N+1 Singer said of FreeAgent yesterday: “The strength of the group’s product, the go-to-market strategy utilising various channels and the significant addressable market leave us confident of the group’s growth prospects.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here