In early 2020 there were over 5 million self employed. The most recent figures show this has slumped to 4.3 million, a fall of 14%. This has occurred at a time of continuing low unemployment. It took place against a background of changes to Treasury rules for companies employing self employed contractors designed to reduce the numbers. There were also early retirements from self employment brought on by lockdowns.
Self employment growth is essential to healthy growth in an economy. Self employment can expand capacity quickly where it is needed. It can produce more innovation and better value than large companies can manage quickly or at all. Many self employed people provide great service. They have to take full responsibility for their actions and for their customers’ satisfaction.
The latest variant of IR 35 rules makes it more difficult for people to start up as self employed, and puts larger companies off hiring them. Of course there should be rules against people who simply work for one company entering into an arrangement that is designed to create tax advantages for themselves and or the company compared with a proper employment contract and PAYE salaries. Nor do we want to see people forced into less job security by employers who want to strip them of some benefits whilst keeping the benefits of their work.
What we do want is the ability of people who choose to do so to offer their services to a range of companies and customers without tax rules getting in the way. We need a pro self employment revision to the tax code, which was better before the 2017 and 2021 changes.
February 26, 2023
Good morning.
Not only has there been a drop in the number of self employed, there has been a drop in the number of people returning to work.
It is a government website, Sir John :-
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/reasonsforworkersagedover50yearsleavingemploymentsincethestartofthecoronaviruspandemic/wave2
This poses a problem. With people either retiring or dropping out early who is going to pick up the fall in the tax take ?
I have said here many times, work must be seen to pay. If you keep taking more and more from people, they will just either go somewhere else or, find other means of living, whether it be on benefits, early retirement, or even the black / grey economy (eg window cleaning – cash in hand).
There is only so much people can take from a rapacious government.
February 26, 2023
Quite, the ‘nature’ of work is changing. Automatic checkout machines don’t pay tax. I was watching a ‘work social scientist’ talk about the soon coming AI functionality; goodbye white collar workers.
We will need to redefine what humans can bring to productive capacity. Who or what will the government tax?
Here’s a place to start; how about we have a national policy to grow all that we eat except that which our climate prevents?
February 26, 2023
Grow all we eat. Not with the Consocialists paying farmers to rewild with their net stupid religion. Importing our energy to export our manufacturing. I’m afraid the Tory’s are beyond reform and need to go the way of the dinosaurs. We the 46% can no longer afford their socialism and frankly not prepared to pay it.
February 26, 2023
In the light of what you say their plans make more sense.
All of us sealed in our zones. No jobs to go to. No cars.
All deliveries made to hub in zone. No choice of shops or goods.
UBI channelled to us via the internet they are frantically upgrading ( assuming we have behaved ourselves or deductions will be made).
Energy use in house controlled by Smart meters..carbon footprint too high, bill not paid and itâs turned off.
It certainly wonât be life as we knew itâŠit will be a living Hell.
February 26, 2023
I visited my local âcar & coffeeâ meet this morning and in attendance where two motorcycle policemen showing their new âzeroâ electric police motorbikes, âŠthatâs nice but theyâre imported from the USA, they cost 4x more, they require 2x as many due to constant charging âŠ.and my council taxes will increase to fund them
February 26, 2023
Mark, why do you think theyâve got to get rid of cash? It wonât take long my kids hardly ever carry cash, one of them just pays using his phone. They have been indoctrinated at University to accept monitoring, photo ids, cashless society, they are just waiting for the over 60âs to go (and thatâs speeded up over the last three years). If they get rid of all the bank branches everyone else has to get used to it or you wonât be self-sufficient.
February 26, 2023
The best way to boost employment – self or any other kind – is to rejoin the EU single market. Every day that passes proves the huge economic damage done to the UK by Brexit
February 26, 2023
Sorry guy, if your so infatuated by that dictatorship I suggest you take a return rubber dinghy to France as most of us have realised the EU for what it is and thats not democratic.
I must say I would be happier if we had no one of migrant origin in government, but that is at least manageable at the ballot box.
February 26, 2023
Ah, I have some news for you. We are all of migrant origin, every last one of us. Some of us have been in Britain longer than others, but every last one of our species traces origin back to the African continent
February 26, 2023
@MFD +1
The EU doesn’t permit Democratic Over-site on any of its proclamations. MEPâs are there to rubber-stamp, they are they cannot amend, repeal etc. any rule, regulation or law handed to them by the Commission. This was reinforced by the frustration Clair Fox MEP experienced as what are MEPâs for.
It is also what this Government hangs onto, a European style of Government as opposed to a Democratic Government the rest of the free World gets to enjoy.
February 26, 2023
Gary
Over 90% of companies in the UK do not trade with the EU, we do not need the EU for their so called workers either, we have plenty of our own that do not have a job, and there are plenty of jobs about for those who actually want to work.
February 26, 2023
The EU single market means EU rules over which we have no control (and never seemed to have any influence over even when we were in the EU). The EU runs the single market for its benefit, and that won’t include the UK. So no trade deals of our own, we have to accept what the EU offers good or bad.
February 26, 2023
Utter rubbish.
February 26, 2023
GM, the EU’s unemployment rates especially in southern europe are pretty abysmal. Also it’s horrendously difficult to start a self employed business there, compared to the UK. I did it once in France but had to pay national insurance taxes on my “estimated income” up front, before I could start trading and earning any money. Unbelievable!
February 28, 2023
Unbelievable indeed but untrue ⊠according to Article R243-1-1 (last writing DĂ©cret No.2019-1050 published 11 October 2019, modifying the original DĂ©cret No.2003-1372 published 31 December 2003) legifrance.gouv.fr âCode de la SĂ©curitĂ© Sociale Articles 243-1 a 243-26) a new employer can delay the social âcotisationsâ due for their employees (âla part patronaleâ) up to 13 months after the company starting its activities. The fraction de these cotisations due by the employees should be automatically deducted from the employeesâ salary.
A request to delay âla part patronaleâ must be produced by the employer and sent to URSSAF (Union de Recouvrement des cotisations de SĂ©curitĂ© Sociale et dâAllocations Familiales) as soon as the company starts remunerating its employees.
For a self-employed (âtravailleur indĂ©pendantâ), the URSSAF is less âgenerousâ and for a new self-employed starting their business, the âcotisationsâ must be paid within 90 days (urssaf.fr âQuand payer mes cotisationsâ). Once this has started, the self-employed can choose to pay every month or every three months (05/02, 05/05, 05/08, 05/11).
Maybe your accountant did not provide you with the proper information âŠ
February 26, 2023
Yes those EU derived rules preventing employees working more than 48 hours sure encouraged more employment đ
February 26, 2023
We have an FTA with the EU – and that’s close enough for me.
February 26, 2023
EU too expensive Gary. We’re already broke. Can’t afford it.
February 27, 2023
Are you saying, Gary, that the negotiated trade deal, which we discovered tied Northern Ireland in knots unable to freely trade with the UK, is worthless anyway, and it isn’t really a trade deal at all? I’m confused.
February 26, 2023
Many people, me included, hastened out of self employment because of govt. interference and regulations that made prices and making any profit totally impossible.
Something different and odd is happening now whereby there are self employed folk on Checkatrade etc etc but it is VERY difficult to engage them. They just donât turn up! Are they all on benefits and thus donât really need the work?
February 26, 2023
Cuibono,
I have to wait six months to get a builder because they are good and in demand.
February 26, 2023
A 6 month wait is a good recommendation for the state of self employment?
February 27, 2023
Cuibono,
No really, it only means that good builders are in demand. It says nothing for the iniquity of government barriers to self employment.
February 27, 2023
The UK needs to train British teens in new modern building techniques not just rely on time-served builders to train others (they usually concentrate on nepotism and if their family members don’t want to stay in the trade we run short of apprentices because taking an unknown apprentice on in the UK is a nightmare).
February 27, 2023
Just a little point, my Secondary Modern School had a G stream. That stream of teenagers were taught practical trades, there was an onsite garage with qualified mechanic tutors teaching the course, a greenhouse and landscaping course where they looked after the school-grounds, a bricklaying course, a woodwork course and a pottery course to prepare people for work. I can’t recall them doing plumbing. Rishi’s suggestion to force all 16-year-olds into another two years of maths will just increase absenteeism and give children and schools a headache, practical maths can be taught in all these trades, in fact, practical maths is essential in all of them, ordering the right quantities of products, working out areas and costings. We just keep making the same mistakes time and time again.
February 27, 2023
One of the worst is teaching too many the performing arts, flooding the market where other markets are protected and leaving grads and A level school leavers unfulfilled with broken not ‘promises’ but ‘aspirations’ in the dirt.
February 28, 2023
+1.
February 26, 2023
Nope. All as busy as they want to be. Which ain’t what it used to be
February 26, 2023
Which suggests they have another income stream?
February 26, 2023
âBrexiteers are used to being let down, but letâs give the Prime Ministerâs deal a chance
Those leading the Brussels talks are all committed Leavers. Letâs trust them on national sovereigntyâ
Daniel Hannan in the Telegraph today.
But why would we trust Sunak this Government or any power for the ECJ? Sunak got almost everything wrong as Chancellor and caused the current inflation. He is wrong now on tax levels, the vast government waste, the war on the self employed, motorists, on net zero, on migrant augmentation with fast tracking, on burning wood at Drax, on HS2, government is still even pushing the duff âvaccinesâ ⊠why on earth should we trust him now? He is not even showing us the wording and is clearly trying to push it through without proper scrutiny.
February 26, 2023
Yes, it does look and smell like a May type stitch up. You’d think that lesson had been learned. The deal is supposed to be made public tomorrow. It’ll be interesting….
February 26, 2023
It won’t be interesting but a reminder following Major, Cameron, May and Johnstone, not to trust the Tory’s who simply….. lie.
February 26, 2023
It would be wise to NEVER listen to the siren sounds of, Myrtle đ
February 26, 2023
+++
And has Sunak handed our âPandemic Responseâ over to the WHO yet?
We need worry about an alien invasionâŠour govt. would sell us off to the Martians without a second thought! (Probably for prime steaks or mince).
February 26, 2023
@Ashley +1
Yes these people that want power actualy want to deny it to those that give them the right. There is no understanding as to what a Free Sovereign Democracy is. Before even talking they should have insisted that a Foreign Political Court cannot be used in our Democracy it has no legal basis â its not even democratically empowered in the EU
February 26, 2023
If we have to stand before the ECJ than we’re not sovereign ….its a simply concept
February 26, 2023
The treasury sees self employed as tax evaders hence IR35.
They work on the premise that everything belongs to them and they will allocate spending money.
Hence their push for a cashless society so every transaction can be monitored.
February 26, 2023
Ian
I very much agree with every word.
They fail to see that money moves around and, when it is able to move to the furthest parts of the economy, the economy tends to grow for more and more people. If you restrict both how money is made (ie through work, innovation and enterprise) and allow people to keep more of what they have made, they tend to spend it on more and more things, thereby spreading it further out.
If on the other hand you reduce a nation to living on State sanctioned tax credits with no ability to save for a rainy day, you de-incentivise people, either form making an effort, or to spend. This creates a never ending downward spiral.
February 26, 2023
Self-employment is a crime under Socialism. If you don’t work for the State you’re a profiteer.
Welcome to Socialist Britain brought to you by the Tory,Labour, SNP triumvirate
February 26, 2023
Dom, you left out the worst â the green partyâ Green on the outside RED to the core!
February 26, 2023
and dim all over!
February 26, 2023
….and they still only have 1 MP, but that 1 MP controls the other 649
February 26, 2023
@DOM +1 That is what happens when 1984 becomes the Bible and not the warning as intended.
February 26, 2023
But this government doesn’t want more self employed; make people unwelcome don’t be surprised when they leave.
This government just wants “big business” (except the car industry apparently which it is destroying with the campaign against the internal combustion engine).
February 26, 2023
The Big Car industry will be just fine. They will make fewer cars in Europe and America, but the rest of the world, and especially China and India, will just carry on as before.
February 26, 2023
China is on schedule to make 50% of all EV and 90% of all EV batteries
February 26, 2023
âI wonât agree terms that fail to deliver for Northern Ireland and the Union
The Protocol is creating serious barriers to trade within the UK. I cannot accept thisâ
Rishi Sunak in the Telegraph today.
Sorry Rishi but no one sensible trusts you an inch given you disastrous record as Chancellor and PM so far. What is the basis of this deal you are desperately pushing? You fail to say anything specific just worthless waffle. Any role for the ECJ clearly a politically biassed court is unacceptable Rishi.
February 26, 2023
He should be getting on with Boris’s NIP Bill – getting it through the Lords and applying it – and then getting straight on with the illegal immigration Bill which he has delayed as well. This new negotiation with the EU is a vanity project on his part and will cost us all dear.
February 26, 2023
Since I left my profession an even more terrible regulation appears to have come in.
It is a kind of scrutiny of oneâs personal affairs ( âso and so had an argument with his mother and used these words and is now suspended/struck offâ). As seen some years ago in the Instituteâs quarterly journals. A sort of hall of shame.
Extraordinary.
February 26, 2023
Soon to be put on steroids once Digital ID come into place.
February 26, 2023
On Friday two (I think sub-contracted) young workmen turned up one and a half hours late. Went and fiddled about for about two hours. Showed me what they had ( hadnât ) done. I was so dumbfounded that I thought Iâd got the estimate agreement wrong. I said âfine, thanksâ then checked job description on e mail.
Job definitely not done as agreed by a long way so I phoned contractor ( used before and generally great) who arranged for same young blokes to come yesterday to actually do the job.
They didnât come.
Luckily no money has been handed over.
I reckon our laughingly called âeducationâ system has a lot to answer for.
February 26, 2023
As one such erstwhile self-employed, who lost sovereignty over our small business because of the over-reaction to covid by the Government and because of the Coronavirus Act 2020 which denied proper healthy debate in Parliament, I urge anyone who cares about the sovereignty of the UK to look at Brexit Facts4EU.Org:
“Sunak, the EU, and the imminent risk to UK sovereignty – Your country needs you today”.
(Thank you, Sir John, for permitting me to post this. Mary M.)
February 26, 2023
Thank you Mary M for alerting us to this required action! I will follow Facts4EUâs suggestions.
Since the EU referendum in 2016, and during the lockdown years, government has wilfully taken absolutely no notice of any instructions or voices of concern about anything from their people. They have lied and attempted to act without proper consultation on a number of things! This has to change!
February 26, 2023
+1
February 26, 2023
IR35 was started by Gordon Brown and has been relentlessly tightened by 12 years of Tory chancellors. There are no significant differences between the two parties on the self employed or small busineses.
The tory assault on private landlords is also symptomatic of a party who display clear leftist nannying tendencies.
Like the Ukrainians said to the Russian warship… I am sure readers know the rest… Neither of the mainstream parties are to be trusted, its wife open Sir J for a Margaret leader to step in.. the question is will it be before the GE or afterward losing by hundreds of seats?
February 26, 2023
Rhoddas,
The conservatives, so calling themselves, are far too socialist in their thinking and behaviour to be retrievable. They require replacing with a party that thinks and acts Conservative.
February 26, 2023
we keep looking but can’t find one.
February 27, 2023
MT,
Reform your vision.
February 26, 2023
Quite right. As someone who spent most of my life as self employed I know the value of that sector. They are crucial to a healthy economy and functioning society.
The last three years have wreaked havoc in this sector and at the same time transferred business and vast wealth to mega companies and giant financial institutions. This I believe was an intentional outcome of the wrecking ball of policies to allegedly control Covid19. The real purpose was always to control people, instil fear in them and diminish their lives.
These ideas are now being doubled down on with 15 minute cities, digital ID’s and CBDC. And now the WHO pandemic treaty to put this communist led, unelected body in charge of UK policy. What exactly is the point of elections?
February 26, 2023
The point? So they can pretend people had a say in their agenda and the majority approved it. When in reality, the Westminster Uni-Party operates a CONsensus to prevent choice (as Blair and Hague nicely demonstrated the other day when they jointly called for Digital ID and a Social Credit System to be introduced).
February 26, 2023
The WHO wants to change from an advisory organisation to a governing body whose proclamations would be legally binding including implementing quarantine and treatment. Is this power something we want to give to an unelected body that got things so wrong during the pandemic? Our government, yet again, seems wedded to giving away our sovereignty. Andrew Bridgen raised this in parliament yet the minister stood there and told him it was a good idea. This is the biggest takeover of our democracy since we joined the EU and must be stopped. People seem unaware of what is happening and the consequences for the future of our nation.
Of course, when we are forced into another damaging lockdown because of bird flu the government will say their hands are tied. No international treaties should be signed that give away our sovereignty.
February 26, 2023
“Nor do we want to see people forced into less job security by employers who want to strip them of some benefits whilst keeping the benefits of their work.”
Before I retired, I dealt with lots of self-employed and personal service companies. The majority, approx 95% of the personal service companies were FORCED into this, and would have preferred self employment or ideally, employment. Companies want to save on the huge cost of employing people. These companies should be easy for HMRC to spot if they permanently have PSC’s on their books, doing the same job year after year. If we take HGV drivers as an example, the majority are not academically inclined and would be far happier if they were employed. Few want the hassle of a PSC and using umbrella companies is expensive and reduces their pay even more.
We saw with the shortage of HGV drivers that this attitude can backfire, as many HGV drivers took other sources of employment.
February 26, 2023
Tax rules should be simple and efficient, but the convoluted âsystemâ that exists feeds itself on increasingly worthless complications.
February 26, 2023
Sir John, IR35 was introduced by Tony Blair. The incoming Conservative Government did not repel it. Sorry but no excuses we still have this piece of legislation on the books. Bit like VAT on Energy still there.
The benefits system does not encourage self-emplyment if you do not have a skilled trade. The call for self – employment may be covering the fact that the cost to employ people is getting higher and lager companies are down sizing or leaving the country for a cheaper labour market.
What help does the Government give to small companies developing battery technology or other CO2 reducing research ? You may recall how one small company went out of business
February 26, 2023
To use Enoch Powell’s phrase, this illustrates the ratchet effect of socialism.
February 26, 2023
Bad as a Labour govt would no doubt be itâs extraordinary how many bad measures have been put in place quite deliberately by a Conservative govt.
February 26, 2023
John knows perfectly well that many of these people are in fact employees, but required by their employers to identify as self-employed to allow them to take free of what would be their responsibilities in a properly-regulated economy.
The labour shortage has, however, forced many employers to up their games, and so understandably those in precarious “self-employed” positions have taken those jobs.
February 26, 2023
NLH,
Typically muddled socialist herd animal thinking.
February 26, 2023
@Agricula
Usually, I don’t agree with NLH but this time I think there is some of truth in what he says.
February 26, 2023
Good point, lad. Too many companies use this scam to avoid having to commit to regular provision of work, pensions, holiday pay and sick pay. They do it because they can.
February 26, 2023
Globalists and Socialists don’t want self-employed, independently-minded people. They want multi-nationals and legions of low-wage slaves.
And that is also what the Treasury and therefore Hunt and Sunak want. They’re so much easier to control.
Meanwhile, Sunak appears to be about to copy Treason May and betray the 17.4 million who voted for Brexit as well as demonstrate that the Unionist part of the Not-a-Conservative-Party’s title is completely obsolete. He has excluded the DUP from the discussions, which is a clear demonstration that he has not met their 7 tests.
No-one has voted for Sunak to be PM; not even CONservative MPs. He has no mandate. If he betrays NI he must be ousted and if necessary a General Election must be held.
February 26, 2023
That is right – No one voted for Sunak to be PM. He was appointed in a coup.
February 26, 2023
Forget ousted. We just need an election to clear the stables. The Tory’s need to go. Then they can reflect on their selection processes to ensure all Liberal Green Socialists are removed from their party. All trust is long gone.
February 26, 2023
1 Jul 2019 â Shadow chancellor says party could introduce new system, cutting minimum tax-free inheritance from ÂŁ475000 to ÂŁ125000. The independent
More Labour type proposals here: 50% tax when earn over ÂŁ100k and they take 62% anyway by clawing back the personal allowance, have kids and earn enough to be considered higher rate and no child benefit for your spouse to help pay for the childcare when working or to help to support the stay at home Mums (only single parents get that support from government to look after their own children).
https://www.wrigleys.co.uk/news/tax-and-estate-planning/the-labour-party-manifesto-2019/
February 26, 2023
Indeed the fact that nobody has voted this PM into place itself should be sufficient to deny him any opportunity for anything other than a caretaker role. Get yourself elected properly Sunak before going anywhere near agreements and treaties on our behalf.
February 26, 2023
HMRC is, and always has been, anti self employment. Aided by persistent tabloid falsities, they have sought to create a narrative that the self employed fiddle their taxes.
February 26, 2023
The simple fact is Governments of all types do not trust self employed people, probably because they need to think outside the box sometimes to survive.
IR35 was the big push to try and kill off, and or hugely regulate the self employed, and it has been tweaked by many governments since then.
Covid was the final straw that broke the self employed back, with no or very little help given to help such workers, whilst ÂŁ Billions were given to new start up companies specifically formed to grab Taxpayers money under the guise of supply contracts.
It should have been so simple, help based on the last years tax returns, but no nothing.
Meanwhile contracts handed out to newly formed companies, some just a few days old with no record of ever trading before.
Clueless, absolutely clueless. Again !
February 26, 2023
Actually Allan to be fair the self-employed did get a type of furlough under covid called SEISS based on your previous couple years tax returns that indicated your gross income.
February 26, 2023
a-tracy
Not a single self employed person I am aware of got any help at all from the government at all, perhaps if it was available without a huge amount of caveats, it should have had rather more publicity and been promoted properly!
All those who I am aware of when they made enquires were told they did not qualify for any help, all had been trading for years and had their tax affaires up to date !
Hence many continued to work under the rules that allowed them to at the time, or could not work at all. !
Indeed many used up years of savings, or borrowed money to sustain themselves at the time.
Many still paying the price.
February 26, 2023
Iâm sorry to hear that Alan I helped a couple of people to get it, it was quite straight forward but they had been self-employed for a few years and I believe a few people who hadnât already lodged a tax form the previous year can unstuck.
Self-Employment Income Support Scheme statistics – GOV.UK
GOV.UK
https://www.gov.uk âș government âș self-employment-…
16 Dec 2021 â 2.9 million individuals have claimed at least one of the 5 grants. In total, ÂŁ28.1 billion has been claimed across 10.4 million total claims.
I believe at that time nearly 4.9 million individuals were registered self-employed.
February 26, 2023
Berkshire Alan. You are having a laugh. My friends husband is a self employed plasterer. He got a generous furlough payment but worked through the whole lockdown period. He and his wife are now on a wonderful world cruise courtesy of the taxpayer. A neighbour at the end of our road works for the NHS. She was being fully paid as normal and yet when she got covid she received the ÂŁ500 from the government. Scandalous.
February 26, 2023
There were quite a number of fraudulent claims for business bounce back loans and they bounced the companies anyway coming back in a different disguise.
February 27, 2023
Fed up
How could a self employed person get Furlough payments, I was not aware that was possible unless they simply told lies, or he owned a Company and was paid PAYE, in which case they would not have been self employed. ?
Perhaps I only know honest people or misunderstood the rules, but all self employed people I know asked their accountants, who said not possible ?
Retired myself so did not affect me. !
February 26, 2023
Having been one, I know how important to the individual and ultimately the country self employment is. There are a large swathe of individuals I would describe as unemployable, they are not herd animals and do not require the security of the large organisation, public or private. They have too much self belief and intolerance of management structures that are too slow witted to react to market demand. They know that a formal large company will only pay them half what they are worth , the other half going to company profit. I left and went self employed, in a totally different field, when after one year I was earning more than the joint managing directors of the company I was in.
Were I to do the same today, in a totally more onerous UK tax regime, I would quickly up sticks and move to a more welcoming one, and I would not have to move far. Not the answer for a window cleaner so the tax greed of the UK must be altered to cease burdoning the fledgling seeds od economic growth. Even the Bible recognises this with the seeds on stoney ground homily. A smattering of the self employed are the seed corn of UK economic growth. Think Sir Frank Whittle and the jet engine for example and the blindness and ingratitude of the UK government of the time. Your lot and the other side of the floor constantly repeat history at the countries exspense.
February 27, 2023
+1
February 26, 2023
We are advised that small businesses employ more people in the Uk than huge corporations.
Many small businesses are started by part time, self employed people sometimes working from home who then grow into very small but significant businesses, that occasionally grow even bigger, and sometimes perhaps into larger businesses as they expand.
You would think that the Government would want to encourage such risk takers, but no, they want to penalise them with additional legislation and punitive taxes which often starve them of re-investment money, and make them fearful of taking on more staff.
Afraid now the personal financial risk of going self employed, or setting up your own business is not worth the meagre reward any more for many people.
Simple fact of life.
February 26, 2023
It was interesting hearing a Russian say today that they have no middle class to speak of, and that while there are big businesses, there are very few SMEs and self employed.
It looks as if this is the model for the Usurper.
February 26, 2023
Excellent suggestion by Simon Heffer to do an audit of all public sector employment positions. Obviously leave out uniformed armed services, doctors nurses and police, all of which we need more of. But the armies of bureaucrats and admin positions which are subject to inexorable growth need to be looked at. The public sector grows in numbers every year (despite eg fewer and fewer uniformed members of the armed forces). Many of these jobs are highly paid and carry expensive extra costs such as pensions. Meanwhile in the private sector there is in many areas a struggle to find people (which is typically blamed erroneously on Brexit).
Thatâs the way to cut public spending and so cut taxes (a policy which according to a poll out today carries 2-1 support amongst the public). Look at the 5 1/2 million people we employ in the public sector and take a rigorous view as to how many of them we really need.
February 26, 2023
I worked for the Civil Service many years ago and every year the Time and Motion team would evaluate everybodyâs job to ensure it was set at the right grade and that the work being done was required. We also had a staff suggestion scheme to put forward money-saving ideas. Having recently experienced the NHS this is sorely needed again. Iâve never seen so many people doing duplicate roles and wandering about aimlessly carrying bits of paper.
February 26, 2023
Richard, donât both parties like their public sector workforce? They basically allow them to get away with agitating for subsidy or pay increases and then everyone sucking at the public teat gets the same rise, more perks, more un-taxed benefits, it is the private sector that end up paying the extra taxes to facilitate all these increases, and if you pay more tax you have less money to reward your own employees and finance your business growth, the extra 31% corporation tax is going to do untold harm to SMEâs in the next year whilst most are still recovering after the pandemic, but again, perhaps is the plan, weâll all be in the public sector controlled by the unions. Control – being the optimal word.
February 26, 2023
Better still get give them 6 months notice and get them all to re-apply for and justify their own jobs themselves. About 50% could usefully be released to get real and productive jobs in the private sector or even start businesses with their redundancy money. Many actually do positive harm to the economy by wasting the time of and inconveniencing the private sector. The whole of the net zero lunacy, the road blocking, the war on motorists and the self employed, the energy market, healthcare, education and housing market rigging & HS2 for good examples.
February 26, 2023
“Thatâs the way to cut public spending and so cut taxes (a policy which according to a poll out today carries 2-1 support amongst the public).”
Because the public believe the tax payers money myth..
February 26, 2023
Richard 1 – We do not a have a US constitution and we do not have a Donald Trump, a business man who cut regulation. All we have is an army of career politicians and pen pushers who are total wasters. Redwood puts out theses blogs everyday but does not admit his Globalist Establishment government is openly promoting and implementing the WEF agenda and says nothing.
February 26, 2023
Richard
In many cases those extra people are hired to produce/record countless bits of information that no one ever reads.
The paperwork is produced in many cases to cover someone’s backside if any thing goes wrong, but when it does go wrong no one is held to account, so it’s all pointless and awsate of time and money, the taxpayer always picks up the bill !
February 26, 2023
In a wider context than IR35, mention was made on this site of Mr Kwarteng not long ago, and he was described as “Liz Truss’ chosen Chancellor”. As we contemplate the prospects of Mr Hunt doing little or nothing to help the self employed in the next Budget, we may ask who chose him – the civil service or the WEF?
February 26, 2023
Sunak NIP deal = ECJ inclusion into UK Law
I wonder how the NIP affects self employed
February 26, 2023
Very slowly the penny is beginning to drop.
If you have no heavy industry to fall back on, if the money makers (oil, coal and London banks) are distrusted, if the tax system is so complicated that it is very easy to wriggle out of, then, of course, the state is going to go broke.
Add in Net Zero which pushes electricity prices up and up and ends national production of oil and coal.
Welfare, thanks to the broadcast media, is flavour of the month. Single Mums and NHS victims every night, demanding more and more money, which in our case we have not got. Young men, cannabis, no intention of working.
Welfare and the armed services (Ukraine) are going to dry slowly up. Richer people will (cp education) go private and the rest will go under.
Socialist policies always end like this. Venezuela?
February 26, 2023
How dare anyone want to creater tax advantages to lessen the amount of extortion they pay to a government who will squander the money on sending death machines to Ukraine, importing the entire third world or employing diversty propagandists to lecture us on how evil we are?
At this stage avoiding paying tax should a moral imperative as it merely supports a system that is so harmful to us and our way of life.
February 26, 2023
âThe need for more Self Employmentâ 100% agreed.
However, my understanding for the creation IR 35 rules was because âsomeâ due to the corrupt and distorted tax system in the UK tried to manoeuvre around the tax system so as to award and allow some of their employed more take home pay without officially paying them more. As in some that are close on 100% full time with just the one employer being called self-employed as a tax fudge.
The downside and usual ham-fisted Revenue management, it sets out to punish those with good and great intentions by being self-employed.
The UK systems generally and tax in particular, are fudges on top of fudges, allowances on top of allowances and subsidies on top of subsidies all contributing to an overweight system of bureaucracy, administration and therefore inherent unfairness that costs us all more than is necessary.
We need a Government and a Parliament capable of getting a âgripâ and actually manage for the benefit of the UK as a whole. MPâs are deluded if the think they have an allegiance to a so-called party, they donât they are there to represent their Constituents it is that simple. They should never be dancing the tune of different minorities who would find their niche of âentitlementâ in what ever system was in place. Inclusion is when everyone is the same not when one group is singled out.
February 26, 2023
Self Employment, the route to paying less Tax, to manipulate paying less in Child Maintenance, to be supported by all those who are on PAYE who have no choice but to fork out 100% of the Tax due. Until the HMRC have sufficient Investigators to monitor the âactivitiesâ of the Self Employed it will always be just a step above the Black Economy.
February 26, 2023
Oh yes, so all guilty until proved innocent?
February 26, 2023
W S
You sound like a person who is fortunate to have a very safe job.
Clearly you have never been self employed, otherwise you would realise just how silly are the comments you have made.
Self employed people start off the week not knowing how much they will earn on Monday morning, get no paid sickness benefit, get no paid holidays, Pay in full for their own Pensions (no employer funding for them) pay their own public liability insurance, pay all other own expenses which go to running a business, telephone, stationary, transport, computers, phones, office equipment, advertising, postage, possible rent, business rates, also have to spend unproductive time completing VAT returns, Tax returns, and often have their own family house up as security on any loans.
They also have to spend time searching for customers at their own cost, Pay for holding stock, working or storage premises, tools of the trade, and sometimes get bounced for payment by customers.
They actually pay tax on the purchase of all of the above expenses, as well as perhaps medical/accident/illness Insurance premiums, income tax, and National Insurance.
If you think the self employment is so easy, suggest you give it a go !.
February 27, 2023
The reason the UK had such a significant IT industry is because employees used to get skilled up in key technololgies then go contracting for a while. This had the effect of rapidly spreading in demand skills across industry.
However it was often pretty onerous, less secure, much higher quality and quantity of work required, travel etc.
Now with IR35 (and the additional constraints brought in by the Conservatives), large companies can employee people to do this and get all the tax breaks (travel, accommodation etc.). Individuals not longer can – and its just not worth it.
The effect is to gradually kill off industries as skills transfer ceases (UK companies are woeful when it comes to training).
Abolishing IR35 is probably the one thing that Sunak could do that would have a massive immediate effect on UK productivity (what can you do at a macro level to achieve micro level change).
Iâm not holding my breath.
February 26, 2023
The problem is that some workers exploited being self-employed so HMRC rightly clapped down on them. As usual, they went too far and some genuine workers got caught in the changes. I know someone who was on 80k a year and by setting up a company that paid her minimum wage she was able to claim Tax Credits. I know several people who have now left the UK to become digital nomads abroad. The aim of HMRC should be to fairly tax income generated in the UK not base it on where people live. The same applies to large companies like Amazon and Starbucks which hide behind Irelandâs low corporation tax.
What you donât want to do is risk scaring off the future real self-employed as they risk everything by setting up a business. I would do two things immediately â 1) Raise the VAT limit and 2) Reduce the level of Corporation Tax to match Irelandâs.
Of course, I donât expect this idiotic government to do anything other than make things much worse.
February 27, 2023
Christine
I VERY much agree with you, especially on your last points.
No one has ever asked themselves, why do people prefer to work as self-employed, rather than as an employee ? There are many reasons I am sure, but no one ever asks. The money that these people get, even when they do not pay their full tax gets to move to other parts of the economy. And as you suggest, increasing the VAT rate whilst reducing both Corporation and Personal taxes would mean people would have more in their pockets to spend and the government get the taxes through expenditure.
February 26, 2023
The war on the self employed goes way beyond IR35. Look at whatâs happened over the last few years: increased tax complexity, the creation of a huge imbalance of power between HMRC and the taxpayer, the pointless and ridiculously onerous âMaking Tax Digitalâ, the increased tax on dividends, the freezing for 7 years of the VAT registration threshold, the prohibitive regulations for office buildings, the war on private landlords⊠Not to put too fine a point on it, weâre starting to feel as though weâre criminals.
February 27, 2023
The Beast needs feeding.
February 26, 2023
There are very few cracks in the system today that individuals can take advantage of . Initiative is stifled anyway by the Sunak/Hunt regime . The economic future looks bleak and I cannot see a way out for the Conservatives . I pray for some type of magic wand .
February 26, 2023
Perhaps apply a minimum number of customers before you are considered âself-employedâ even if it is only two clients billed in a year. The big opt around it anyway by using umbrella companies who just lump together four ex-self employed people to bill them as one. So the self-employed are still around, theyâre just operating differently.
February 26, 2023
The problems with IR35 arenât just due to the recent changes but date back to when first introduced by Gordon Brown.
IR35 introduced a second set of rules for tax on top of the standard definition of self-employment. They are fiendishly complicated and have taken 20+ years of case law to only partly clarify what they are. HMRC has fought multiple expensive legal cases with small businesses over this time, many of which they have lost.
The recent changes targeted compliance to large firms who receive considerable fines if they get it wrong. Due to the complexity of the rules, many have erred on the side of caution and placed all of their contractors as agency workers. The contractor gets taxed as an employee without any employment rights. Many have voted with their feet.
What is needed is a single simple definition of who is self-employed and who is an employee. Do not just reverse the recent changes.
[Disclosure, I am a self-employed contractor who has previously worked as an employee.]
February 26, 2023
“Of course there should be rules against people who simply work for one company entering into an arrangement that is designed to create tax advantages for themselves and or the company compared with a proper employment contract and PAYE salaries”
Why should there be rules against people “who simply work for one company”? Many of them don’t know that will happen when they start out – they simply win repeat busness by doing good work.
Note that the Treasury nonsense that plumbers “have more than one client at once” is utter tosh – how can one plumber be in two places at once? He can’t be fixing your boiler while he’s stopping my dripping tap at the same time. Like every other self-employed person, they have one client after another the only difference is that their engagements are shorter than, say an engineer or an accountant because the work is far less complex.
The tax code needs to recognise that this is actually none of its business. If it gets in the way, it will be endlessly at war with its citizens. The underlying problem is the vast disparity in employment taxes versus other ways of working (and a Treasury determined to push everyone down that route because their remit is as it was in the Middle Ages – gather as much tax as possible).
The biggest differentiator is Enployers NI. It’s an utterly self-defeating tax on employment that hampers job creation and competitiveness (a company employing an Indian or Polish call centre worker based in their own country doesn’t need to pay it – no other country is daft enough to have this kind of tax and differential). It creates an incentive for people to move to a lower-paying status.
Key question: Why should employment be taxed so much more heavily than other ways of working?
Up to now, the only answer has been to try to increases taxes on other ways of working (self-employment etc) – failing to recognise that those who work on a gig basis 3 or 6 months at a time… can decide to stop working for part of the year. Those who earn enough to do that are exactly the people a vibrant economy needs to incentivise to work as much as possible – not the other way round!
Changing tax rates changes behaviours, this is only one example.
February 26, 2023
How about if govt. prints money to build a twenty lane bridge ( with facilities of courseâŠfree restaurantsâŠlounges etc) across the Channel.
No barriers/gates whatsoeverâŠexcept of course to stop us trying to escape in the opposite direction.
No more ILLEGAL IMMIGRATION.
Problem solved!
February 26, 2023
When I first became self-employed in 1987, and remained so for about twenty-five years, there was a very sensible HMRC rule which said that you could only be counted as self-employed if you had a minimum of four clients, precisely to avoid this kind of mess. That rule was trashed by New Labour and the subsequent Cons, and suddenly we were asked to believe that Big Issue sellers and the like were âself employedâ. It became almost a synonym for being unemployed. Itâs an absolute travesty and no-one has had the common sense to return to a system which actually worked.
February 26, 2023
FOUR clients? Sorry, that’s not remotely “sensible”.
That’s a failure to define or understand.
February 27, 2023
And by the way, it’s also creating a definition that they know few people can possibly achieve.
A lot of the professional gig work is complex, has dependencies and interatcions with many other people over a long period, most of whom are full time. Therefore the work needs a presence that’s more than 1.25 days a week, which is what a woring week of 5 days spread across 4 clients gets them.
Or look at a lorry driver – how does he work 1 day a week for different companies?
It’s nonsense – and probably deliberately so (simply put: they don’t want people to pass these tests).
February 26, 2023
The other issue is we still live with The Volcker Myths.
The BOE spends most of its time destroying jobs.
https://medium.com/@monetarypolicyinstitute/the-volcker-myths-8579cea33b95
February 26, 2023
Is the Usurper keeping tax ever higher as part of the concessions he is making to the EU? Or does Hunt just do as the Treasury says and the Usurper goes along with it?
February 26, 2023
And is it true that he is dispensing with both the NIP Bill and the illegal immigration Bill in deference to the EU and Biden?
February 26, 2023
Wouldn’t surprise me
February 26, 2023
@johnredwood
If a Northern Ireland Agreement with the EU is close it would be wise to publish draft text so the people who will have to live with it can comment. It needs consent by Unionists.
Without wishing to pre-empt what is really in any new format, there is the concern the UK has of late been mimicking the EU. The Government offers dictates, you can talk about them all you like, this is not a democracy their way or no way – ego above common scense is the priority. The people and their MPâs do not have the intelligence to see what’s good for them
February 26, 2023
No it doesn’t need consent by Unionists or Nationalists or ERG all it needs is consent between the UK Government and the EU. IF any of the protagonists are unhappy then there is always the next GE – democracy in action
February 26, 2023
Off topic. Ellie on Countryfile is going on about…..you guessed it….climate change. Ages going on about bow the destruction of peat bogs is bad for the climate. Doesn’t she realise how many ancient peat bogs were intentionally dug up to make way for wind turbines in Scotland? I despair.
February 26, 2023
We must be a very wealthy nation â Eurovision Song Contest
The Government taxpayer subsidy ÂŁ10m payment
The BBC licence /taxpayer subsidy ÂŁ17m payment
Merseyside council tax subsidy ÂŁ4m
Forget helping the self employed or small business lets spend everyone elseâs money on woke events
February 26, 2023
Self Employment:
Not just Taxes, cost of Accountants, or the complexity of admin, there is an other issue;
As an IT consultant, I use a PSC, with a limited Liability.
But, I don’t need it, if I didn’t need to protect my self from big company’s.
They use NDA’s and withholding money, as a tools from which to acquire the IP of any work or project they want control of.
I would be happier running as a sloe trader, with cash accounting, for more suitable!
But, removing or limiting the effect of IR35 would help?
And, to simplify the process of contracting, and if the tax rate was clear in the first place (Knowledge before contract negotiated) and after the period of earning (been paid), then it would be far easier to comply and give HMRC less work to verify the liability?
Regards
RDM
February 26, 2023
Re “Of course there should be rules against people who simply work for one company entering into an arrangement that is designed to create tax advantages for themselves and or the company” what is the difference between an individual taking a gig with a big multi national, with the intention to not be there permanently, but maybe do 12 months there… with the same individual taking a job with a big consulting firm, with the intention of not being there permanently, & consulting firm sub them into the same big employer for 12 months? in the one case they are forced to pay for work travel hotels etc out of taxed income, and in the other work travel hotels etc comes untaxed. the rules are a nonsense. and many good businesses start off with one client for 12 months or so. the rules are heavily biased by the lobbying the indian outsourcing movement has done to make using their staff far less tax heavy as using independent locals. the political class have shown how little they understand.
February 26, 2023
The sell out deal is complete â more votes to the Reform Party
March 1, 2023
infosys not keen on cheaper, nimble IT self employed competitors follow the money