ONE of Scotland’s fastest-growing technology companies is calling on the Chancellor to use next week’s autumn statement to cut a “blatant tax on jobs”.
Angus MacSween, chief executive of Glasgow-based IT specialist Iomart, branded employers’ national insurance (NI) contributions as “the tax that no-one wants to talk about”.
MacSween, who unveiled growth in half-year profits that smashed through City analysts’ predictions, called for an immediate employers’ NI “holiday” to encourage firms to hire more staff and for the long-term reduction in the tax.
“We never talk about employers’ NI contributions – it’s a huge tax on employment that everyone ignores,” MacSween told The Scotsman. “I would like to see it coming down permanently.
“It’s not helpful and it’s a direct tax that stops people getting into work.”
MacSween, who launched Iomart in 1998 and floated it on the Alternative Investment Market (Aim) in 2000, said that he is satisfied with the current levels of investment that the UK government is pumping into laying optical fibres, which will deliver faster broadband to households and businesses.
Iomart employs 260 people in the UK, with around half of them working in Glasgow.
He said that investment by telecoms companies in extending fibres will increase because demand will rise from businesses for faster internet access.
His comments came as Iomart revealed that underlying pre-tax profits jumped by 66 per cent in the six months to 30 September to £4.9m, beating analysts expectations for a 35 per cent rise.
MacSween said that the company had won clients – including online tyre retailer Black Circles and technology firm Questionmark – as well as selling more services to existing clients.
“When customers trust us with one aspect of their IT then they start trusting us with other projects,” he said.
Revenues increased by 29 per cent to £19.9m, with MacSween saying about half of the growth came through its existing business and the other half through acquisitions.
The company has made a series of takeovers, including Skymarket in July for £1.4m, Melbourne Server Hosting for £6.7m in August and Internet Engineering last month for £1.5m.
MacSween said the company was still mulling a number of other purchases, but that he didn’t expect to complete another deal before March’s year-end.
Iomart has also grown its margins because it owns its own infrastructure – such as data centres were information is kept and its own optical fibre network – rather than renting equipment or space on servers from other companies.
MacSween said he expected margins to continue to rise as the firm uses up more of the spare capacity in its data centres.
The company said that it is installing a further 600 “racks” of computer equipment at its Maidenhead centre, increasing capacity by about 20 per cent.
Paul Morland, an analyst at house broker Peel Hunt, said: “Plans to add up to 600 racks, combined with a new fibre network, should ensure Iomart the infrastructure it needs to continue its impressive growth record over the next few years.”
FinnCap analyst Andrew Darley described the interim results as “relentlessly positive”, adding Iomart’s fibre network would help it to capture more business.