From Business to Business: IT's Inn at Scotland

Mike Horley, a top-level IT freelancer with 22-years' experience, was forced to leave his successful small business behind and look for another business opportunity after IR35 made it impossible for him to continue.

Mike had worked for some of the biggest clients in the country, including: EDS, Marconi, BAE Systems and Racal, doing top-level military application work. His wife, Pam, handled his PR and secretarial work - she was dealing with around 100 agencies at one point - and Mike was invited back by some of his clients up to four times either to work on new projects or as extensions to previous ones.

They have since both taken the money earned through the IT consultancy to Scotland in order to start a new life as hoteliers, with a neat second business of offering training courses to city-weary IT beginners.

Mike explained: "I was working for NATS before I left contracting for good in November 2001. I realised my IT skills were relatively old in comparison with more recent developments in the sector, and although I had just been trundling along in the contracting sector for a little while, IR35 was really the deciding factor that made me decide it was time to bow out.

Mike and Pam Horley in the bar at their new hotel

" IR35 really has destroyed the contracting scene; and on top of that there is the current economic downturn and fast track visas to contend with. Neither of which are doing anything to help businesses already struggling in the sector."

Mike and his wife travelled from Penzance in Cornwall to Inverness, Scotland looking for a business opportunity they could re-apply their enterprising spirit to.

The couple settled on a 500-year old farmhouse building in April this year, set amongst the hills of Thornhill, Dumfriesshire, in South-East Scotland and opened Woodlea Hotel.

"We feel sorry the Government destroyed our original business... It's a shame they've lost me for good" - Mike Horley and his wife left their IT consultancy behind after IR35 threatened to destroy it

Mike said: "It's probably the best value property we had seen in that whole two years. It's set in four acres of grounds with an indoor heated swimming pool, sauna and tennis courts."

Their plan now is to organise coach trips to the hotel from the South, so PC beginners can learn the basics of using a computer in a relaxed holiday environment.

Mike explained: "When the bar and restaurant are finished, we're going to start doing IT tuition courses for middle-aged business people whose kids are running circles around them when it comes to general computer competency. We hope to start next February. They'll be laid back courses and not taught by 19-year old whiz kids our older visitors wouldn't be able to identify with.

"The plan is to do 14 courses a month with around 10 people per course. The basic set-up would be:

Woodlea Hotel: "It's probably the best value property we had seen in two years," says Mike

• first day - basic description of IT terminology and showing them what sort of equipment they need;
  
• second day - how to wire it together and then using basics of using Windows;
  
• then a series of basic Microsoft courses for Word, Excel, Access, PowerPoint, etc.
  
• then Internet and email lessons, showing them how to navigate around the web.

"We'll also be doing health and safety courses as well as fire prevention and even cooking courses after the IT ones are up and running."

Mike was clearly looking forward to his new business taking off, but was similarly disappointed that the Government had put his skills and the skills of other IT professionals in the IT freelance sector to waste.

He said: "I am sorry the Government has wasted our skills as a consequence of IR35. They were told they could save £450 million if they put it through, whilst accountants warned it would actually cost the Government £8 billion to implement it. It's ridiculous. It's destroyed the whole UK contracting scene, which was one of the best, if not the best, in the world."

Mike said even if the market picked back up substantially next year he didn't think he would go back into contracting.

"Most of the other contractors I knew have gone abroad because IR35 threatened to destroy them if they stayed here," he added.

If the ongoing economic or regulatory conditions mean you have swapped your freelancing business for something entirely different, we want to hear from you. We are looking at entrepreneurial freelancers who have moved from one business to another and have demonstrated that, far from being 'disguised employees', they have taken the risks involved in earning the rewards of running their own business email UKTECH

Mike and his wife did more than most to get the Government to sit up and take note of the damage IR35 was doing when it was first introduced.

He explained: "We met with our local MP, Nick Hawkins, the Shadow Minister for Home Affairs and International Development over IR35 and he was very sympathetic about our predicament, so were a lot of other MPs we spoke to, including many Labour MPs. We also got an article in the Daily Mirror criticising the legislation.

"Just before the last election my wife managed to get through on a phone-in on Sky News when a Minister was talking about how much Labour was doing for the small business community, and spoke for a few minutes about the damage IR35 was doing and how it had destroyed our business. The next caller to get through meant to speak on something entirely different, but started backing up my wife saying that the UK stood to lose professionals from the industry because of IR35."

Meanwhile business at the hotel continues to grow and Mike and his wife have recently employed a local chef and other members of staff from the local area.

"I think we'll make a nice way of life out of this, but we feel sorry the Government destroyed our original business," he added.

"It's a shame they've lost me for good. I'm very happy with what we've got now and I wouldn't go back!"