Ignoring pressure to delay imminent public sector IR35 changes, Philip Hammond unveiled the Government’s new tax plans, the majority of which are at the expense of the UK’s 5million self-employed.
- Class 4 NICs raised from nine to 10 per cent from April 2018, with further one per cent increase in 2019.
- Tax-free dividend allowance to drop from £5000 to £2000 in April 2018.
Seb Maley, Qdos Contractor CEO said: “Regardless of what the Chancellor says, the self-employed don’t enjoy the same kind of benefits or workers’ rights as employees. To raise Class 4 National Insurance, and slash the tax-free dividend allowance from £5,000 to £2,000, reduces the benefits of working independently.”
IR35
Any last-ditch hopes that the Chancellor might delay the incoming IR35 public sector changes were dashed and will go-ahead in April 2017 as planned despite pressure to delay or reconsider.
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"Given the genuine concern over the effectiveness and accuracy of HMRC’s new IR35 tool however, there’s very little time or room for mistakes when setting public sector contractor’s IR35 status - which is concerning.”
Businesses below VAT threshold of £83,000 to be given one more year to prepare for digital quarterly tax returns.
Seb Maley said: “Giving many businesses the extra time they might need to prepare for quarterly tax returns is a positive move. That said, it isn’t enough to take the edge off a concerning budget for the UK’s self-employed.”
'Short-sighted and contradictory
Commenting on the Budget overall, Seb Maley said: “The Chancellor promised that to build a ‘country that works for everyone’. But from a freelancer, contractor or small business perspective, there’s little to be upbeat about.
“Freelancers and contractors work without employee benefits such as holiday and sick pay and company pensions. Raising taxes for the self-employed at such an uncertain time for contractors – particularly for those working in the public sector – seems shortsighted and contradictory.
“Independent workers are the engine room of the economy - contributing £119bn to the UK in 2016. To continue to do so, they need to be given every opportunity to thrive and prosper, not burdened with higher taxes for taking the risk to go it alone.”
Further information
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Susie Hughes © Shout99 2017
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