The Tories have announced that they want to end self-employed national insurance contributions.
Two questions follow. The first is, why? This makes no sense. Why shouldn't the self-employed pay NI? What is the reason for this bizarre attempt to increase horizontal tax inequality in favour of a group who already do not, according to HM Revenue & Customs, pay 18% of the taxes they owe? Is this all about encouraging tax abuse?
Second, how will the self-employed have their old age pension contributions recorded - or is the Tory plan to deny them a pension? That is a point that has to be clarified.
As it stands, this plan is bizarre at best and utterly ill-thought-through at worst. Either way, it's a sign of desperation.
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Maybe a focus group suggested ‘white man van’ could support marginal constituencies ?
UK has more 1 and 2 person companies that almost anywhere else in Europe or US (that was true a few years ago!). Self employment loophole benefits have been closing in last decade, but they still confer many benefits/ flexibility compared to low-salaried public sector workers (vehicle purchase benefits, dividends, not to mention ‘just pay cash’).
So, they are encouraging tax abuse….
The whole of self-employed National Insurance contributions is not being abolished – only the lower main rate of Class 4 contributions will go. The higher rate which kicks in above £50,270 will remain.
What is your source for that?
“how will the self-employed have their old age pension contributions recorded”
Took me all of 5 minutes research to see it’s Class 4 NIC they are abolishing, not Class 2 NIC.
Is 5 minutes too long before you fire off a blog wrongly accusing them of wanting to deny the self-employed a pension?
You know class 2 has already gone?
How long did it take you to miss that?
So, what is left?
Baring in mind they won’t be paying anyone state pension until they are at least 75, it won’t matter to quite a few!
The Tories won’t be in office to enact that! The problem is Rachel Reeves may enact it when she gets her feet under the table! I should start taking bets!
Cut tax for workers by taking another 2p off employee National Insurance so that we will have halved it from 12% at the beginning of this year to 6% by April 2027, a total tax cut of £1,350 for the average worker on £35,000 – and the next step in our long- term ambition to end the double tax on work when financial conditions allow.
❱ Cut taxes to support the self-employed by abolishing the main rate of self-employed National Insurance entirely by the end of the Parliament.
Conservative Manifesto 2024
Cryptic – the headline they are issuing does not support that
Paul Johnson of IFS on R4 PM Programme remarkably myopic analysis of Tory manifesto and Labour – – just tax/ spend /borrow.
He never asks or points out that the ‘national debt’ could be only half what it purports to be , or that we could stop paying interest on bank balances created following QE
Amazingly – and contrary to media opinion – he is nit the only economist in the country
Eliminating NI for just the self employed would have the effect of enticing workers from regular employment to dodgy zero hours type contracts. Once a significant number have moved over, it becomes easier for unscrupulous employers to drive employment conditions even further down. A deregulation of labour if you like.
Agreed
Highly likely
Look at so many people already being forced into these dubious situations
This will just continue the punishment and rooting out and destruction of the creative industries in the UK whose workforce are self employed as artistic endeavours are by their nature temporary and unpredictable. I have worked in lower and upper echelons of both the arts and the technocratic economies. The lack of understanding of how cultural creation works in the latter, mostly based in a combination of ignorance and envy was shocking.
Agreed