The budget

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Jamesnkr

The budget

Post by Jamesnkr »

Some items that may affect framers:

1. Anybody operating through a company, the tax-free dividend allowance (that operated for a year and allowed you £5,000 of dividends tax free) has been reduced to £2,000.

2. Anybody leaving the small business rates relief regime will be capped at £50 per month for rates.

3. For the self-employed, 1% on NI next year and another 1% the year after.

I confess it has never made sense to me as to why the self-employed or those operating through a company should pay less tax than those who are employed, so it's not exactly a surprise.
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Framerpicture
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Re: The budget

Post by Framerpicture »

This budget has increased tax on entrepreneurial risk takers, increased tax on the self employed who get minimal sick pay, no company pension, no paid holidays and no redundancy if it all goes wrong and all from a government that promised not to raise NI contributions in its manifesto.
After encouraging many new people to become self employed, it now seems like all this was a trap!
I feel it all also implies that the VOA got their last revaluation of business rates very wrong :head:
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Re: The budget

Post by misterdiy »

Jamesnkr wrote:I confess it has never made sense to me as to why the self-employed or those operating through a company should pay less tax than those who are employed
Well unless I am mistaken, self employed people do not get any benefits such as unemployment benefit or sick pay so its only fair that they pay less.

Unless the rules have changed?
Jamesnkr

Re: The budget

Post by Jamesnkr »

Less, but how much less? Don't forget the "employer's NI" that they don't have to pay either, which is a further 13%. They now do get pension benefits; whilst they don't get 'sick pay' they are entitled to employment and support allowance and the Chancellor indicated that they would be able to expect parental benefits too.

For somebody earning £32k p.a., there is a £4k discrepancy in the amount of NI payable. Over a 40 year working life that is £160k.
An employee earning £32,000 will incur between him and his employer £6,170 of National Insurance Contributions.

A self-employed person earning the equivalent amount will pay just £2,300 – significantly less than half as much.

Historically, the differences in NICs between those in employment and the self-employed reflected differences in state pensions and contributory welfare benefits.

But with the introduction of the new state pension, these differences have been very substantially reduced.

Since 2016 self-employed workers now build up the same entitlement to the state pension as employees, a big pension boost to the self-employed.

The most significant remaining area of difference is in relation to parental benefits, and I can announce today that we will consult in the summer on options to address the disparities in this area as the FSB and others have proposed.
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Re: The budget

Post by Chris2103 »

Just announced on the radio news that the Chancellor has listened to public opinion :roll: and removed the NI increase for self employed :clap: :clap:
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Re: The budget

Post by Framerpicture »

Good to see the government has come to its senses, although Mr Hammond must be 'a dead man walking' in regards to his job.
Hoping for a reversal on the dividend tax free cut now, but not holding my breath :head:
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