Class 2 NIC
Self-employed groups slammed the reversal on NICs as a betrayal and said that it shows Government support for self-employed is draining away.
The scrapping of Class 2 NICs – originally announced in the 2015 Summer Budget – had been delayed a year to April 2019, but in a written statement quietly released last week, Exchequer Secretary to the Treasury Robert Jenrick announced the Government would not proceed with abolishing the tax during this parliament.
The tax cut would have saved self-employed people around £150 a year.
Andy Chamberlain, from self-employed group IPSE said: “This decision to backtrack on a pledge to abolish Class 2 NICs – a awkward levy which applies only to the self-employed – is a fundamental breach of faith with the sector.
“This Government-led attack on the self-employed is the latest in a barrage of bad decisions which has left our smallest businesses feeling helplessly abandoned.
“Only last year this supposedly pro-business Government try to shackle the self-employed with an increase in Class 4 NICs. Even though they eventually u-turned – thanks in no small part to IPSE’s lobbying work – they had clearly set their sights on the self-employed.
“Combined with other disastrous policies such as the planned extension of damaging IR35 reforms to the private sector and talks about lowering the VAT threshold, this latest decision serves only to stifle the UK’s self-employed workforce.
“The Government should be finding ways to help the UK’s 4.8 million self-employed people. They could do this by sticking to their promises and removing burdensome tax mechanisms such as Class 2 NICs.
“Instead, they seem intent on squeezing as much revenue out of the self-employed as possible.”
New Enterprise Allowance
This was followed a day later by media reports that Treasury officials have told business leaders that the Chancellor is planning to cut a scheme that had been designed to help people start their own business.
The Government had regularly praised the success of the New Enterprise Allowance scheme – which has helped over 100,000 Britons start their own business since 2011 – but it has now emerged that the Chancellor is not expected to renew it at the Autumn Budget.
Andy Chamberlain said: “The New Enterprise Allowance has put over 100,000 people onto the path of viable work, from the white van man to the one-woman band.
“Encouraging people into self-employment and to run their own businesses is an overwhelmingly positive thing for the economy, as it lowers unemployment and boosts Government coffers in the long term.
“The Government should think very carefully before axing the Allowance, and IPSE would like to see it reformed rather than repealed. IPSE is calling for more targeted financial and mentoring support for NEA-backed businesses after the initial start-up period, to increase their prospects of long-term success.
“What is doubly damaging about this move is the fact that it comes just 24 hours after the Government decided to backtrack on a pledge to abolish Class 2 NICs – an awkward levy which applies only to the self-employed.
“Can it really be true that the supposedly pro-business Conservatives would attack small business twice within 24 hours?
“Both moves are fundamental breaches of faith with the self-employed. How can they possibly be expected to drive the UK economy forward if they are constantly looking over their shoulder wondering when the Government will come for them next.”
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Susie Hughes © Shout99 2018