I am glad the PM has agreed to delay NI proposals and has confirmed that the Chancellor will listen to concerns. They will receive a report on the wider issue of self employed status and will also consider the differences in benefits between the self employed and other employees.
I am still consulting my constituents on the issue and will welcome their views on these wider issues as well as on Mr Hammond’s tax increase proposal.I will then put suggestions to the Chancellor.
March 11, 2017
It is not just the issue of NI contributions from the self-employed, because it also reveals the general policy and tenor of the present government. Both May and Hammond stand accused of back-sliding and I have little faith in a PM who appoints a Chancellor with known remainiac outlook and who repeatedly has shown himself as a sucker of the mandarins in whichever Department he nominally leads.
Today I shall surely agree with any sentiments which Lifelogic may care to contribute!
Although I could be wooed back to voting support for the Conservatives, they still do not enjoy my trust.
March 11, 2017
http://www.telegraph.co.uk/news/2017/03/11/lord-rings-brexit-guide-people-need-home-come-back/
March 11, 2017
It’s all down to whether you wish to encourage people to strike out for themselves, or create a zombie population who always work for The Man, turn up at 9, leave at 5, take an hour’s lunch break, 6 weeks holiday a year, take SSP, maternity and every other pay until they’re made redundant then go on the dole.
These are two totally different working life choices.
If you wish to encourage the latter, then fine, just carry on the way you are.
March 11, 2017
Employable labour in the UK is becoming more and more expensive. Already there is talk in certain circles I travel in of automating even some of the most basic tasks. People are being replaced by both robots and software. Even outsourcing is seen as expensive and unnecessary.
Times are changing and the political class, trapped inside their safety bubble, connot comprehend what is going on in the real world.
March 11, 2017
What they have done or are encouraging with this budget is profoundly anti-conservative at heart and is effectively an own goal – very odd political judgement
zorro
March 11, 2017
Indeed and not just absurd NI attacks there was the dividend tax increase (by lowering the Ā£10K threshold, and suggestions that the small rent a room tax relief will go too. In addition it introduced a second layer of inheritance tax (over and above the absurdly high 40%) by the new back door probate tax.
This while they are still ratting on the Ā£1M each IHT threshold promised eight years back by Osborne. They are still going ahead with the demented sugar tax too.
One things for sure these people are ever bigger state, tax & waste socialists to their core. It will not work it never does. The government has never really managed to raise more than about 37% of GDP in taxes they are at that now and spending far more. It is hugely damaging.
Hammond and May surely are just more deluded socialists, just Ed Miliband with rounded edges.
A good area to start cutting would be:
https://iea.org.uk/publications/research/sock-puppets-how-the-government-lobbies-itself-and-why
But there is fat and daft red tape everywhere to cut out.
March 11, 2017
Well it should be anti “what is really Conservative”. But then after Heath, Major, Cameron it is clear that most Conservative MPs are essentially just climate alarmist, over taxing, red tape pushing, central wage controlling, socialists. Most are probably still EU remainiacs too I suspect.
March 11, 2017
There is an HMRC NICs comparison for the self employed v employed at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/597485/NICs_fact_sheet_final_web.pdf
March 11, 2017
Thanks, better to get it from the horse’s mouth.
March 11, 2017
acorn
Not a very good report as it completely ignores all the other taxes paid by self employed. It ignores the fact that a large number of sole traders employ full time workers, pay workplace pensions. It ignores the fact that there is a massive overhead with form filling and compliance oh and the small fact that sole traders pay a portion 0f their income tax BEFORE they’ve earned anything
In fact its a typical public sector report totally ignoring ALL of the issues that surround a topic in favour of their ONE belief, which is they could get more money if they put up tax,despite the fact that its repeatedly shown that the reality is that they dont. If they implemented this scheme they really won’t make the revenue they think they will, for all kinds of blindingly obvious reasons
You either want to encourage people to start businesses and create jobs or you want everything run by the state and big corporate business .
Your choice, using new technology we can base our businesses anywhere we like!
If the SNP weren’t a bunch of marxist idiots this could be their big chance at independence. Offering a small business friendly independent Scotland and attracting 4.8 million businesses that the UK government, the Tory party and the socialists all hate
March 11, 2017
The reason for the “White van man” reaction is that so many people have been forced into self employment by employers no longer offering proper employment contracts. This is large businesses saving money on employment costs, not entrepreneurship or the individuals trying to game the system. It is completely wrong to say that they enjoy the same benefits as employees. They have no sick pay or maternity pay or holiday pay or pensions. It gives the employers control without responsibility or cost.
This is the area that most needs reform, and the attempt to fix one of the many holes in the government finances by penalising further these individuals is intolerable. It displays a complete lack of knowledge of the real employment world by the economists and politicians who thought this would be fair. It’s the Uberisation of the work force that is the real problem that needs to be addressed.
Well done for bringing these issues to ministers attention.
March 11, 2017
I suggest any civil servant or think tank economist who favours the NI proposal be sent on a six month secondment as a self employed home delivery courier in order to further their education.
March 13, 2017
John E
I’m afraid you are wrong on why people are self employed
The vast majority of self employed work in in either construction or professional services. A vanishingly small number have been “forced” into self employment. HMRC have been conducting a crackdown on those corporates such as Pimlico Plumbers, Uber , Deliveroo and others that have done this.
You are partially right on why the government are wrong
The self employed are NOT asking for the same rights as employed people. if they wanted that they would remain as employees. What they want is a tax regime that rewards them for their risk taking and business creation, whilst recognising the overheads and taxes they already pay that PAYE employees dont
Politicians and the public sector hate the self employed because they can’t control them and they can’t buy them off with their own money.
March 14, 2017
John E, employers pay 100% of statutory sick pay and more expensive statutory sick holiday pay, so if someone is sick for 28 weeks the small employer pays his employee SSP and three weeks holiday pay. It is no longer claimed back from the state even for employers with only one employee.
The self employed can get Maternity Allowance for 39 weeks if they pay class 2 NI of Ā£2.40pw. Don’t forget the employee also has an employers NI contribution of 13.8% that pays the extra 6 week top up of 90% of usual earnings, do you really think every male or female self-employed worker wants to pay this to receive that benefit.
It is their employer that pays holiday pay not the national insurance fund.
It is their employer that pays 3% NEST and the employee themselves who pay 3%, does the self-employed as they employ themselves want to pay 6% compulsory workplace pension I don’t believe they do.
March 11, 2017
Manifestos should be confined to policy objectives, and not commit governments to the details of the means used to reach those ends. That would have saved a lot of trouble about a generally sensible measure. But manifesto commitments like not raising NI, and locking pensions, are more about gaining popularity than governing well, and should be left until the party is in government and can legislate for those means to reach its ends.
March 11, 2017
Why?
People need to have some idea about the policies they’re voting for.
AS for fairness:
Most self-employed people would struggle to replace themselves in the event they are sick.
Most self-employed people don’t get proper time-off paid holidays or maternity let alone paternity leave (just regarded as a joke).
So, in the event a self-employed person gets paid more than the equivalent employed person, they pay a higher rate of tax than the employed one anyway.
In the event they are sick and can’t replace themselves, their business goes down and they lose their jobs and income totally, which the employed person doesn’t.
SSP or no SSP is irrelevant.
Is that fair?
March 11, 2017
It is the perceived attitude of the Chancellor. He appeared to think the self-employed are getting something for nothing. It was and still is a brave person who decides on self-employment. Many had little choice, anyway.
March 11, 2017
“Many had little choice, anyway” vs. SJS’s “these are two totally different working life choices”.
And how many do have a real choice?
March 11, 2017
hefner
how many do have a real choice you ask
Answer ALL of them 100% have a real choice this isnt your utopian Venezuela or Cuba
March 12, 2017
libertarian
If a worker is dependent upon a bad Personnel or Human Resources Department and his last bad boss for a reference…and in practice he is then that worker has no choice whatsoever. If he has capital he may start his own business. If not, he can become self-employed in some career paths. Why so many bosses take any notice whatsoever what a previous boss says; in fact, says much about the incompetence of most bosses. They clone themselves. Good clones if they themselves are good. But as the pre-Brexit “expert opinions” showed we have a sorry genetically worn-out and dumpling boss class.
March 12, 2017
E.S Tablishment
It is highly unusual to give someone a bad reference because of the legal ramifications. The vast majority of companies when giving a reference state the start and end date and capacity employed thats it.
Here are the rules https://www.gov.uk/work-reference
You are deluded if you believe that people can’t find alternative jobs having fallen out with a previous employer. Football managers get sack for failing and then hired almost instantly. As does just about everyone else unless you were sacked for a criminal offence.
If a new employer asks for a reference its normally a personal reference as well as previous employer because all employers know previous employer references are useless
Most businesses no longer require capital to start. I started my first business for Ā£25
March 12, 2017
Indeed, clearly it was thought by them to be better than the alternatives.
March 11, 2017
Self-employment should be encouraged. It is a psychological fact, we are are own boss from hell. Tyrannical, slave driving and despite outward appearance of arrogance at times, very insecure and self-critical to the nth degree.
We make bad bosses of others because they do not have to tolerate our excesses and stupidities. They do not have to live and sleep with us.
March 11, 2017
And what do you get as a country? an autarcy likely to slide back “in the concert of nations”. Sorry, I do not buy that. Don’t you need a country with manufacturers willing to export products or services?
March 12, 2017
hefner
there are 4.8 million small businesses in the UK , if you dont have them thats a big hit to the economy and jobs
88% of UK economy is internal markets ( much like most other countries)
What makes you think that the self employed can’t export ( granted the EU tried their best with insane digital laws to stop 300,000 of them from trading in Europe )
What makes you think that the self employed can’t employ people and can’t manufacture things?
I may have to write a blog for a number of you on here that just have no idea about the world of small business in the 21st century
March 12, 2017
hefner:
Is it 15% of the workforce are self-employed?I’m not advocating an ideology of Self-Employedism. It is just that it is nice to have the ability to walk your own path without a Chancellor roping in his cattle who stray away from the herd.
March 11, 2017
I sincerely hope that your constituents are of the same opinion as me. Bin it ASAP!
March 11, 2017
As has been stated many times virtually on a daily basis there are more vanity projects that could be cancelled or tougher taxation on areas that are being openly abused that would actually negate the need to change NI contributions.
But on the reverse had the Chancellor been in a position to bring about parity to the two groups of employed and unemployed then that would have caused even more outrage.
Sadly if the country wants all these benefits they have to be paid for. We all end up paying one way or another
March 11, 2017
We did pay for those benefits. It just was taken by whatever government of the day and just spent. There was no investment into a Sovereign Wealth Fund like the Norwegians did.
March 11, 2017
John ,
Do you think there is anything which can be done to scrap the plan to replace the annual tax return with quarterly reporting requirements for the self employed please ?
It offers negligible benefits to offset increased administration and has obviously been conceived by people who have no experience of trying to make it in the real world .
It’s incredibly unpopular out here is voter land and really needs to be buried .
March 11, 2017
@ADS; Very well said, but then perhaps the real goal for the HMRC with quarterly reporting and now this NI tax hike for the SE is to discourage people becoming (or indeed remaining) SE, a grouped flock of sheep(le) is always easier for the Sheppard to manage than that is wildly scattered across the hillside…
March 12, 2017
Jerry
That is entirely correct. HMRC and the last three governments have all had a massive down on SE and SME’s. Despite the fact that they create nearly all the new jobs.
Its control freaky of the highest order.
Funnily enough the public sector types that dream up this nonsense approach are so out of touch that they dont realise that with new technology a lot of us can trade from anywhere in the world should we choose
March 11, 2017
@ A d S
Do you think there is anything which can be done to scrap the plan to replace the annual tax return with quarterly reporting requirements for the self employed please ?
I was self employed in Spain and employed people and the rules out there are that your tax and vat (IVA) which is paid by everybody is presented monthly through an accountant.
When you get into the system and operate accordingly it actually works very well and stops all the dreaded demands dropping in when least expected. It also helped in getting money in as everybody was in the same boat and needed the payments to reduce their tax and vat liability. The accountants cost were very cost effective .
The proposed system will be like every other government system it will be a PITA to start with but we will adapt as we always do because we have to.
March 11, 2017
The Probate tax increases are a disgrace and need to be scrapped, especially as they have to be paid before money is released from the deceased’s estate.
If the Justice System cannot live within its present budget then it will have to do what taxpayers – also known as the Government Money Tree – do, cut costs!
Maybe this is a strange concept to many of those who inhabit the Westminster Village?
March 11, 2017
Agreed, Probate tax is a real disgrace.
March 11, 2017
I agree, there should be no place for stealth taxes. The charge should cover the costs and no more.
March 11, 2017
The complexity of the tax system is causing conflicts of purpose.
I won’t go into a litany of examples suffice to say, simplification would be the best solution.
Often promised, never delivered.
The demand for ever more taxation wouldn’t be necessary is the govt would exercise more restraint and desist with their desire to control every aspect of our business & personal lives.
March 11, 2017
Here is a classic example of unnecessary interference in our business:
Due to an Act of Parliament my business is obliged to issue a statement declaring that we will:
– “not allow any form of slavery or human trafficking to take place in any part of our business”
– “not use child labour”
– “not use forced labour”
– “recognise freedom of association by permitting our employees to establish and join organisations of their own choosing without our permission”
– “recognise collective bargaining where required by local laws”
As far as I am aware, all of the above issues are already covered by law.
Do you really think that a company that would use slave labour etc. would have any compunction or hesitation in signing such a pointless piece of paper?
This is a classic case of vain virtue signalling and unnecessary govt interference.
Just like making FGM illegal, but not actually prosecuting the practitioners.
March 11, 2017
It’s Ā£240 per year which equates to two weeks’ state pension payments. What’s the fuss about. I work long hours too and all my earnings are declared.
Where was the outcry when I was robbed of my universal child benefit?
March 11, 2017
NS
its Ā£240 ON TOP of all the other taxes and tax increases and government mandated costs . Remember that next time a plumber charges you Ā£90 to fix a tap or an electrician charges you Ā£120 to fix a light switch
Sole traders declare their earnings too, 4 times a year soon, oh and sole traders have to pay part of their income tax BEFORE they’ve earned the money. Are you sure you want a fair and level playing field?
March 11, 2017
I would much rather the difference in benefits between employed and self-employed be reduced by reducing employment taxes. With 13.8% employer’s NI, 12% employee’s NI, 20% income tax and 20% VAT, my company has to generate more than Ā£1,000 for one of our employees to buy a computer worth Ā£500.
With the AIA, the company might employ a robot to do the job, with no tax implications.
We have policies to penalise and dissuade employment.
March 11, 2017
Dave Andrews
Absolutely spot on , yet still the socialists on this forum and others never get it, they are so consumed with green eyed rage that they just dont understand cause and effect, supply and demand and unintended consequences
March 11, 2017
Don’t know why Matthew Taylor was selected by PM to lead review into employment practices -poor choice. Maybe Hammond’s budget joke about Lamont was more of a prophecy?
March 11, 2017
I read in the Telegraph:
“But after the disastrous āomNICshamblesā Budget, Mrs Mayās extended eight-month honeymoon as Prime Minister is officially over.
The timing could not be any worse. The Brexit process could start as early as Wednesday. Mrs May will need all the good fortune she can get just as it appears to have run out.”
Well, isn’t that a strange coincidence!
Apparently our former Prime Minister has privately condemned this breach of a manifesto pledge, while recommending that in the future the Tory party leaders should avoid placing their cast-iron guarantees on record within election manifestos, and instead just offer them in press articles so that they can be more easily denied later on.
As I understand this is all about approximately 0.05% of government revenues, and while I agree that it seems a bad idea it should be kept in proportion. But then journalists are not noted for their sense of proportion, witness the media furore over the “Pasty Tax”.
March 11, 2017
Pundits on TV are now explaining that a raft of measures are due adding more state benefits to the self-employed.
Hasn’t the Government missed the point? Soon the Chancellor will need a budget in which he proclaims a new category of employment: The REALLY SELF-EMPLOYED.One where Mr Taxman keeps his nasty little dirty paws out of it… in exchange for not paying out benefits.
The Libertarians have a point: Government just cannot stand free individuals. Always it must try to rope them into the corral of dependency, tax, economic and personal slavery.
March 11, 2017
Given the reasons increasing NIC for the self employed was eminently sensible but a PR disaster. Better of course would have been to reduce employers NIC but given that consensus believes high taxes and government spending are the answers to all of life’s ills that is not feasible. A misguided consensus of course as government mostly adds to problems. Rarely solving them.
March 11, 2017
The problem is that when this measure is abandoned there will be others to make up the money, so watch out. He was hoping to get away with it because the public in their ignorance often see the self employed as like the oligarchs who avoid their taxes, when in fact, I would hazard that the majority are on below minimum wage. A few accountants, financiers and lawyers, not forgetting G.P. doctors fall into the wealthy self employed category, but they are the minority.
The government is desperate for tax money, as the deficit in unbridgeable and unsustainable and will not be closed in this parliament or the next or the next and the national debt already unpayable.
Governments don’t like the self employed (never have done, truth be told) because they are not controllable, but having crashed the western economies, the elites have unwittingly made a new generation of the self employed because they cannot find enough work in the traditional way.
I raise again a prediction I and some others made some years ago that it will come down to the Cyprus option in the end when they can tax no more – the plain stealing of our money from our bank accounts.
March 11, 2017
RG$!
I repeat my comments made many times before.
The s genuinely self employed are completely reliant on generating their own business each and every day, they do not have the safety net of a large employer, they do not get holiday pay, sick pay, have to organise their own pensions, pay for all of their own office expenses overheads, travel, car, van, lorry or bike and also pay business rate for the insurance for such, then they have to fill in a plethora of complicated government forms or get fined.
They are not protected by any minimum wage, and are subject to all of the legislation of operating a business including, public liability and product liability insurance.
Thus these people are self driven, and if successful usually employ or sub contract additional work to other like minded people.
They do not get the safety blanket that PAYE employees get so why should they pay the same NI.
All the above is so obvious to anyone who has commercial experience , you do not need an advisor, who has also probably never been self employed, to tell you any different.
Unfortunately the self employed have never been trusted by any government, because they are difficult to control, and think outside the box.
They should be praised, not constrained.
March 11, 2017
Oops RG41
March 11, 2017
Mr. Hammond is but the latest in a (very) long line of ministers who have been misled by a far-left cadre within the upper echelons of Whitehall, which has persistently sought to extinguish independent small firms offering personal services to larger ones (any form of ‘freelance’ work being traditionally viewed by the left as potential strike-breaking).
The IR 35 “guidelines” were especially odious in their vagueness, being wide open to (mis)interpretation, and wrought great harm.
Margaret Thatcher was swift to stamp upon an earlier attempt (?”Clause 61″) as soon as she leaned of the reason for the large protest assembling outside the House.
I myself joined an exodus of technocrats following publication of the Finance (No. 2) Bill of 1974, which was to have “deemed to be closed” our small businesses (this was possibly the greatest ‘brain drain’ in UK history).
There were attempts to rig NIC rules to outlaw ‘freelance’ work even before then. It would be hard to overstate the aggregate harm done over the years both to small enterprise and to the UK economy at large.
March 11, 2017
It doesn’t really matter what the arithmetic is. It was a blatant breaking of a manifesto commitment. Ask Nick Clegg how that pans out. It lets down the self-employed who thought this government was on their side – instead it is tacitly encouraging the “they’re all on the fiddle” attitude. And it was delivered by a smug chancellor who thought it was all a big laugh. As public relations fiascos go, it would be hard to improve on.
March 11, 2017
My neighbour is a self-employed farm labourer and needs every penny he earns. I have friends who are self-employed consultants with lots of disposable income and use any and every tax break going. It was wrong to breach a manifesto promise; it is wrong to treat those two cases as equivalent.
March 11, 2017
This is a direct attack on an economic group in society that simply cannot fight back in an organised manner which of course makes them an easy target. That this direct assault is being perpetrated by a conservative government is truly shameful.
I always believed that the conservative party were the party of the independent, self-reliant and productive. A party that encouraged individuals to look to themselves rather than to the state. Under MT the govt did just that. That approach has been completely overturned by a PM who is more akin to Blair than the great MT
State dependency is again being encouraged and promoted while self-reliance is under attack. Why is this? State dependency allows state control and dilutes individual liberty
May’s a statist which for a conservative PM is shameful
March 11, 2017
FWIW I think his extra NIC on the self employed and extra dividend tax on entrepreneurs are profoundly mistaken, apart from the issue of the broken election pledge. There is a whole world of difference between being on a some one elses payroll (with all the attendant benefits that go with it) and being responsible for you own payroll by having to win sales and make profits before you can pay yourself an income.
Hammond seems to have missed this fundamental point. Perhaps it has something to do with hiring Blair’s former Chief of Staff, Matthew Taylor now of the RSA, to do his thinking for him. The problem with think tanks and those that populate them is that they often lack contact with or experience of the real world in which most people must live.
March 11, 2017
The self employed are not entitled to many of the benefits provided by the State for employees on PAYE. They do not get holiday pay and often work six or seven days a week and anything up to 60hrs a week or more.
When it comes to charging for their work, the market will only bear a certain price, and that price is inclusive of VAT at 20% if the business is VAT registered.
What that means in fact is that VAT is effectively an extra income tax paid by the sole trader or small business owner. The trader’s income is reduced and the amount it is reduced by goes to the Government.
I have spent fifteen years of my life being self employed and it is hard work, often with great financial risk. The Government needs to be giving the self employed metaphorical bouquets of roses, not poking them in the eye.
Look again at the amount of VAT generated by the self employed and remember that that VAT has been deducted from possible income.
March 11, 2017
With NIC, VAT and other measures coming in like the attack on ‘rent a room’ I can only see support for T. May diminishing. Hammond is plainly not a Conservative thinker and has not recovered from the Referendum. With a Marxist opposition and a socialist government (I do not include our host) and very little else, I feel nothing but despair.
Why oh why this all out attack on enterprise and entrepreneurs?
March 11, 2017
I’m more concerned about the increased probate charges. Far from decreasing estate duty, the Chancellor has sneakily added another charge in an underhand manner so that the Tories can say they didn’t increase estate duties. And, of course it has to be paid by my children before they can get probate and have the estate released, so they will probably have to borrow the money.
That is, of course, if there is anything left should either of us have the misfortune to have to go into care!
Time to start giving our money away, I think.
March 11, 2017
If NI contributions started at a much higher level of earnings this would be much less of an issue. The starting level should be raised to a level equivalent to the living wage or the starting level for income tax which ever is higher. The upper band starting level should be raised by the same percentage.
This would not only solve many of the current worries but also bring some more relief to those on low earnings
March 11, 2017
I feel like I am a punch bag to be endlessly punched by the government. Now my NI is going to go up. I still don’t get paid holidays or sick pay or SMP or SPP … I still work round the clock looking for work, doing work, invoicing work, chasing payment for work, doing VAT returns and so on.
The message is clear in this country. Do NOT bother getting off your backside and try to get on in life. If you do, you’ll pay 40% tax and give the government 15 grand if you have the temerity to move house. And, if you die and your estate is worth a few bob, the government is going to have one more go and putting its hands into your pocket. I despair – and this is a Tory government. The proposed increase in probate charges are a bloody outrage! Yet ANOTHER tax! Yet we, apparently have 4 thousand, million pounds to do up the parliament building! Bulldoze and build something pretty and functional there. Something made out of glass.
Had to have 3 goes at ‘select all images with a house’ – some of them don’t look like houses!
March 11, 2017
As usual it starts out as a good idea but then soon turns into another tax raising mission, what it all about, Class 2 NIs everybody self employed pays over 5995 pounds profits a year at 146 pounds a year and when you come to 8,060 pounds profits a year you start paying class 4 NIs at 9 percent of profits a year till 43,000 pound profits, over 43,000 profits a year you pay just 2 percent because your income tax goes up from 20% to 40%, is that clear. Now a women who is married and works for someone pays 5.85 percent over 8060 pounds a year while a man pays the full 12 percent but if a married women works for herself at the moment pays class 2 at 146 pounds a year and the full 9 percent of class 4 NIs and they are always on about equity in pay for women.
So by doing away with class 2 NIs was going to cut the tax bill of the lower profits earns of 5995 pounds to 8060 pounds would pay nothing and over 8060 pounds would pay 9 percent on profits so someone making a profits of 10,000 pounds a year would only pay 176,40 pounds a year in total in NIs instead of 322.40 pounds a year which would be welcome tax cut for people who do not profit much from their work.
To make up the short fall in tax at bottom end they are putting class NIs up by 2 percent to 11 percent for everybody over 8060 profits a year, instead of going back to companies and other body like accountant firms and salesman and making them employ them because they only work for one company and are avoiding 13.8 percent in employed NIs and the works themselves avoiding NIs and income tax because they are nearly all high earns.
March 11, 2017
I know of a few people working for one company and are down as self employed, the accountant firm i use where all the accountant working in his office are self employed and salesman working for one company as self employed then uni and so on, all high earners, then what they do if the wife is not working or anybody in the family who is not working is put them down as working for them to cut their tax bill so you get two lots 11,000 pounds tax free limit and it take you out of the 40% tax and into the 20% tax and you pay lower NIs as self employed, then you have the pension contribution which give you back some of the 20% income tax that you both pay so if you pay yourself 43,000 a year profit with all expenses taken out and the rest go to the family member or if you only make a profit of 43,000 you just cut that in two and then you qualify for child benefit as well if you have young children.
March 13, 2017
ian
You are talking complete cobblers.
It has long not been possible to work as self employed for the same organisation continuously . Where have you been living, have you not heard of IR35 ? Did you miss the HMRC cases against Uber, Deliveroo and Pimlico Plumbers?
As for your accountants they would all be self employed if the accountancy is an LLP as that is what HMRC mandates, however since 2014 they have been treated as PAYE employees for income tax and NI purposes
In your calculations I couldn’t find any mention of any of the other taxes and overheads of a sole trader that PAYE people do not have. Why’s that?
March 11, 2017
Apart from the government apparently reneging on a promise, I cannot see why self-employed should not pay more NI.
Many companies endeavour to put those they regularly use on a self-employment basis to avoid their share of NIC contributions. The self-employed are able to claim for a number of expenses thus reducing their Income Tax and whilst they may be excluded from certain state benefits (reputedly JSA), it would appear they can claim tax credits and would no doubt be able to claim universal benefit if they were completely unable to work.
The current rules seem to be a hangover from many years ago and need updating.
March 11, 2017
NI is a tax past its sell by date. Particularly for a government that s supposed to be cutting the regulatory burden. The complexity of the tax system would be a good place to start. BUT much worse is the imposition of quarterly tax returns through a mechanism called digital tax, and not to mention the effective scrapping of the flat rate VAT system. We mock labour under corbyn, but conservatives under may, don’t sound very conservative to me.
March 11, 2017
I am self employed. I have just worked six days away from home on 18 hour days. That is a statement of fact, not a cri de coeur. I should be well paid for it. So far, so good.
The old rate of NI “was costing the Treasury Ā£11bn”. So, the government effectively says that it has first charge on every penny I earn, but will generously let me keep what is left over after their take. That statement can only make sense if the government thinks that we are all slaves who are not entitled to the fruits of our labour.
But, there is a difference. A slave is housed and fed. In the ancient world, at least, they could do very nicely and win freedom. But I am self employed, so the government owns what I earn but denies any benefit which it is not politically compelled to confer.
Am I missing something? (that question is rhetorical)
March 11, 2017
NI contributions apart, could I ask you John, to try to get the tax-free dividend allowance returned to Ā£5,000 for pensioners?
March 12, 2017
Chop Chop, why still in moderation. Even my ex secretary who is the archetypal devils advocate cannot see anything wrong with it.
March 12, 2017
Yet another attack on the workers of ‘Middle England’ by a millionaire Chancellor and a disappointing Prime Minister.
An as for the Death Tax, disgraceful!
March 12, 2017
The issue for me is a question of trust. No manifesto will ever be trusted again. So whatās the point of ever making one? Another issue is the dreaded vast Probate increase and to be paid before funds released and the time required to pay up cut in half. So whatās that all about and why the need. HMG must be in dire need of cash. Canāt wait for us all to die and soon. Then, I read, there is the requirement for sole traders to pay tax before earning the money. Doubling of IPT. Tax free Dividend tax cut particularly to hit pensioners. Iāve had it with this Government not to mention the loss of interest on our, now diminishing, savings interest from an average of over 6% for many decades prior to 2008 now lucky to get 1% i.e. an income cut of over 80% leaving nowt for any discretionary spending not to mention the lower taxes for HMG on the interest. There are also many angry people trying to live on just the state pension being a small fraction of the so called living wage. Where is it all going to end?
There are many organisations talking about the triple lock on pensions, implying how much better off pensioners are than the younger, putting in question another manifesto commitment. Also how much has inflation, which for pensioners is accepted to be at least double that stated, increased by over the same period further eroding any such income. Not to mention the ever increasing cost of home heating, due mostly to crazy government schemes, being at home most of the time. I guess HS2 et al needs financing.
We are not all in a position to work extra hours to supplement our sole state pension. Typical of government to hit those least able to help themselves. The closing of Remploy issue being another typical example upsetting many dependant families. While there are those who accept multimillion pay-outs every year with few paying tax with the various schemes available for those who can afford it while we have to pay to the very last penny.