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Just listening to the post budget debate and the increase in NI contributions for self employed. And several people over complaining about the 60p per week increase. Painful. It's 60p.
an extra 6p on GT85 I see. Typical tories.
Pretty uneventful - hence a relatively small adjustment, sorry MANIFESTO COMMTTMENT BROKEN, becomes the main story along with, it's difficult making accurate forecasts at the moment, NSS!
So growth is going to trot a long at just below 2% for next few years, we will continue to spend more than we earn, cuts will be back loaded and debt will fall very modestly. I am glad I haven't got to fill tomorrows papers...
It is a boring budget.
Self-employed people are all single handily driving this economy - don't you know that? If we Tax them they'll employ less people and we'll all be ruined - THAT IS A FACT.
It's wrong that that should pay almost as much as PAYE tax payers.
Anyway, joking aside - it's all on it's head - the Tories have just increased tax for the self-employed and increased funding for social care and Labour are arguing with them.
Next week Labour will call for a single flat rate of tax and to hand over the NHS to Sky to run and the Tories will call for standardised salaries to ensure Women and Minorities are paid the same.
TMH Tories enshrined their budget commitment in law in 2015, it explictiy did not include self employed NI.
?
Explicitly? How did they word it?
Change to divi allowances will cost far more, how can anyone plan when he's already changing something only recently implemented.
The self-employed NI is two things really; firstly, against their manifesto and secondly a definite move to tax everyone the same, irrelevant of the status (see IR35 changes, and possible move across all sectors in the future).
The Government argues that the legislation that enacted the tax lock laws, passed in 2015, specifically referred to Class 1 (employee) National Insurance Contributions, not Class 4 for the self-employed.
The manifesto was more generally worded but IMO was clearly focused on PAYE. I forget the exact figure quoted on Sky but it would be a small proportion of self employed who'd be affected, top 20% only ?
I take the 2015 law as a hell of a lot more significant than the manifesto.
Jambas, that's an extraordinary generous interpretation the even the Tory spinners have not been peddling. Yes, technically, the law was subsequently tighter in scope than the manifesto. But at the very least they broke the spirit of their commitment - its a gamble they were prepared to take.
But if this is main headline, it shows what an unremarkable budget it was. LK has to make news and exaggerate for effect on the Beeb but even she could hardly be bothered tonight.
And the Hammond spake: "Though shalt not have any other method of remuneration than PAYE."
It's fine if self employed people pay the same tax. But if they don't get the same security or benefits then they need paid more, or salaried people get paid less....
A lot of IT contractors cream in serious cash, so it doesn't bother me in that sense, but there are a lot of lower paid contractors who balance the tax benefits against not having employment rights like paid holiday etc.
For them it's very unfair and I can't see this move being a massive money spinner for the government.. So my view is it's a strange decision maybe designed to make it look like they are tackling tax avoidance with out penalising big companies.
It's all very predictable.
NI is capped don't forget, so when it rises it hits the lower earners proportional harder than the higher earners.
IT contractors "creaming in serious cash" won't notice the change. Hairdressers, bakers and lecturers will.
was clearly focused on PAYE
[b]Bullshit.[/b]
But we should let you off, it's the post-rationalization being spun hard, so perhaps you're just being misled this time.
I forget the exact figure quoted on Sky but it would be a small proportion of self employed who'd be affected, top 20% only ?
Only 20% of self employed pay class 4 NIC?
How will the increase raise the billions expected then?
The maths seems a bit off there.
You only need to be making about £9k to pay class 4.
I take the 2015 law as a hell of a lot more significant than the manifesto
People voted based on the manifesto, and repeated promises.
The fact it was weakened, or narrowed, and promises watered down, or pulled back from, when written into law, is no surprise.
Most IT contractors won't be affected at all as most are not self employed - they usually take a salary of some description.
Just watching the news, hairdressers are going to be better off, salon owners not so much.
David Gauke getting a roasting on Newsnight
Why not just put your hands up and say - yes, fair cop, but it makes sense so we did it?
Still sad that this is the BIG story!!! At least Evan is refocusing on bigger issues now
Bands before the change:
[u][b]Profit band[/b] Class 4 NI[/u]
[b]Up to £8,060[/b] nil
[b]£8,060 up to £43,000[/b] 9%
[b]Over £43,000[/b] 2%
If we Tax them they'll employ less people and we'll all be ruined - THAT IS A FACT.
By that argument we should be taxing big companies less because they employ more people...
its fine , self employed people will just spend more cash in bike shops to hide their earnings and keep below the thresholds 😀
Just watching the news, hairdressers are going to be better off, salon owners not so much.
Trainees on less than £8k ?
Anyone who thinks being self employed is an awesome way to avoid tax should give it a go! Think how much money you'll save.
Don't forget that if you don't work you don't get paid though - no pulling sickies for you...
By that argument we should be taxing big companies less because they employ more people...
SMEs employ more people than large companies.
As industries move from SME to large company provision, they employee fewer people.
A handy link:
Of course neither the NI changes nor the dividend changes effect employees, or the cost of employing, so all irrelevant.
Peter Dowd no better now with the Shadow plans. FFS, they really are a desperate bunch
I've calculated that I'll be about a fiver a month better off, but that's eclipsed with general cost of living price rises, food, clothes, etc.
As I noted hours ago on the Jeremy Corbyn thread, there will be a serious dumping on Hammond as a result of the NI changes - this is completly unrelated to the fact many journalists are freelancers - politically courageous.
The most depressing thing about the whole manifesto commitment is that one of Cameron's advisers said they only made it because there was a "hole in the grid". My sincere hope is that Theresa May's premiership will stop this lunacy - so far she has seemed very measured, but time will tell.
Time to quote a journalist…
James O'Brien? @mrjamesob 4 hours ago
Well-paid people in, ooh, the media who fear that NI changes may hit lower earners hard will, of course, be accused of self-interest. Smart.
[url= http://www.newstatesman.com/politics/economy/2017/03/budget-2017-government-headed-trouble-over-national-insurance ]Or another[/url]
Worse still, many high-profile columnists and talking heads will be hit by the change which means that the row will likely receive a disproportionate level of coverage for its impact.
But he said it after I did*
EDIT: He may have said it before me, but it wasn't in print/pixel and available to hoi polloi until after my post.
Everyone I know self employed takes a salary at the threshold and then take a dividend - so no national insurance is paid...
Everyone I know self employed takes a salary at the threshold and then take a dividend - so no national insurance is paid...
By definition then they're not self employed. They're employed.
When I was self employed you had to pay class 2 and class 4.
You don't take dividends unless you've got share capital and you are a share holder in your company. Which means you could only be employed.
Ok, but for all intensive purposes they are self employed. The freelance journalists will all be avoided NI
You would have thought that offering incentives to people to start a business would have been the way to go?
However this is not a Thatcher Tory Government, no encouragement for home ownership, starting a business is the polar opposite. Reducing Corp tax to very low levels is not designed to help SME s it's to attract tax avoidance from global business - fairly obvious where they think the economy is going post brexit
When you take all the other changes already announced, looks like the point at which you are going to pay more is £16k, which is much better than I thought, protects those struggling most, but hardly a tax rise just for "those that can most afford it".
Oldmanmtb has it spot on: take the NI, dividend threshold and Corp Tax changes planned, and it's obvious that a shift is taking place… lower taxes for larger companies, higher taxes for small companies. Agree with his reasoning why… we need to encourage international companies to stay, expand, invest, when they're likely to be looking at increases in all their trading costs… yet we also need to increase the tax take ready for the costs to the state of what's ahead.
I suppose I have to embrace and accept that approach really... a wise budget part one.
Which taxes will rise in budget part two? If the money can't be raised from big business?
I'm assuming that next time round they'll sort out taxation on the cash-in-hand portion of the self employed's income. 😆
I never understand why people defend any political party that lies so openly. Are you on the payroll?TMH Tories enshrined their budget commitment in law in 2015, it explictiy did not include self employed NI.
^^^ hope so 🙂
Personally I have been lobbying my MP to introduce withholding tax on GIG economy apps, Uber, AirBnB, Deliveroo etc. Ensure people submit a tax return. Huge amount of evasion imo. 30,000 Ubers in London, Imwinder how many submit a tax return ?
I never understand why people defend any political party that lies so openly. Are you on the payroll?
All politicians lie, blatantly usually.
is anyone seriously surprised at a political party not keeping every single manifesto pledge? I mean really?
A self-employed hairdresser - with average earnings of £12,700 - will be £70 better offA self-employed taxi driver - with average earnings of £17,300 - will be £20 worse off
A self-employed management consultant - with average earnings of £51,100 - will be £620 worse off.
What a lot of fuss about nothing. Given the headlines I was expecting to be about £500 worse off and now I find out it'll be about a fifth of that.
The really annoying thing is that there is a vast difference between different types of self-employment. Those that choose it, those that are denied full-time, etc.
Personally, I choose to be self-employed despite the lack of financial benefits in order to be in more control and have increased flexibility.
g5604 - MemberOk, but for all intensive purposes they are self employed.
I take pacific umbrage with this post.
"is anyone seriously surprised at a political party not keeping every single manifesto pledge? I mean really?"
Nope, yet in spite of expecting them to break manifesto pledges, I still find it surprising that nothing ever happens when they do. I know that's illogical, but there it is.
Just listening to the post budget debate and the increase in NI contributions for self employed.
I went to a real news site to get the real news:
And on a similar note:
[i]Ok, but for all intensive purposes they are self employed. [/I]
No they are not.
[I]A self-employed management consultant - with average earnings of £51,100 - will be £620 worse off.[/I]
Lets be clear, that'll be salary plus dividend. And having just worked it out as a family we're £2k down pa.
Not that I've ever voted Conservative, so no vote lost there 🙂
[I]Personally, I choose to be self-employed despite the lack of financial benefits in order to be in more control and have increased flexibility. [/I]
+1
Lets be clear, that'll be salary plus dividend. And having just worked it out as a family we're £2k down pa.
If they get a salary they are not self employed, this applies to unincorporated businesses, not Service Companies.
I disagree on lies. I think it's absurd that we are happy to allow politicians - our representatives - to lie to us
Their promises should be subject to the same level of accountability as any one else's - in fact more so
My sincere hope is that Theresa May's premiership will stop this lunacy - so far she has seemed very measured, but time will tell.
This would be the same 'very measured' Therasa May who seems to be intent on driving her Brexit truck off a cliff?
The hike NI is too small, after all we need moar Bombs with frikin lasers in em'
In you opinion FF - you obviously have greater clarity than the rest of us (wee nippy aside) on what the results of the forthcoming negotiations will be
Most small business like myself that pay some money out of dividends, pay dividend tax.
We also pay employee NI contributions and employer NI contributions too.
Don't confuse this with the increase in NI for the self-employed.
Also remember companies previously got a govenrment contribution to the Employee element of NI.
ratnips - MemberTMH Tories enshrined their budget commitment in law in 2015, it explictiy did not include self employed NI.
I never understand why people defend any political party that lies so openly. Are you on the payroll?
In regards to the lies thing.
I have never voted Tory, I'm never likely too and I've no reason to defend them.
Did they, lie? are they lying now? You can split hairs about it - but I could NEVER support a Political Party who stick to plans when the situation changes.
They were dishonest to make such bold statements back when they did, voters were foolish to believe them - but sticking to it, just to avoid the messy business of being called in it would the very worst thing to do. Can we blame them? Yeah I guess so, but it was the cabinet that made the statement, and there isn’t many of them left.
When she's driving off the cliff, maybe she could improve her environmental credentials by recycling her home office bus, with the writing on it's side telling immigrants to go home. Be a good use for her nasty bus.
Although I guess she can tell them to go home legitimately now by saying it was the voice of the people. 🙄
The thing is that "it was a manifesto commitment" is used like it's divine writ, Jeremy Hunt can't complete a paragraph without saying "manifesto commitment", we must do it and you shouldn't stand in our way, it's the will of the people. Unless they want to [i]break[/i] a manifesto commitment when suddenly it's not important. Like a lot of things this seems to be swinging to extremes, and contradictory ones- parties have always broken manifesto promises but I don't remember ever before hearing a government speak so much about how things they're doing were commitments.
And they seem to want to just brush off breaking them as if it's nothing at all- you can make a good case for breaking one, you can say "sorry but we need to" or "we got that one wrong" or "things have changed", sometimes "we would be idiots to follow through on that". But instead they're just acting like it's barely worth mentioning.
I see nobody's tackled the really big issue
g5604 - MemberOk, but for all intensive purposes they are self employed.
"Intents and purposes".
The biggest conflict for me is the fact they are lowering Corp tax and raising class 4 at the same time.
That's the real dishonesty.
We need to make our minds up about our ideologies, don't we May?
"We need to make our minds up about our ideologies, don't we May?"
Indeed. The daily mail pinup up girl while Home Secretary, campaigning for remain. Now intent on driving us off a cliff thru a hard brexit.
Frightful woman.
[I]The thing is that "it was a manifesto commitment" is used like it's divine writ, [/I]
Under the current way that legislation is agreed, if it's in a Manifesto that a party wins an election on then the House of Lords won't oppose it, so it is (very) important.
Ignoring any 'get elected and then do something different' issues 😉
As long as payments are roughly inline with benefits its near enough . You won't please everyone. If this wasn't a dull budget you would be having even more complaints from some other interest group. Its impossible to please everyone.
Those who complain about lack of holiday pay need to think clearly. No one gets holiday pay, its just removed from our basic lump some , kept back and given to us when we don't work because many people are too stupid to manage their money. Reminds me of a self employed mate who has a job the goes quiet in the winter. Moans about 14 hour days when its sunny and how he finds it hard to make things meet in the winter. And that holidays mean he doesn't work. Does get it that income is spread over a year, not a week and that he could holiday in January.
Don't get me wrong , I am all for self employment, especially if it keeps us going on small scale local work that allows deals to be done and swaps to be made.
as for tax being the same for all. On a personal, not business, basis that is surely the only way thats fair. Anything else rather misses the point does it not?
intensive purposes
*post reported
In fact, now I've had some time to think about it I can't help feeling that the NI tax increase for the self employed is both a good thing and entirely their own fault. It's been described in the papers as a tax on "white van man", and since that demographic voted overwhelmingly for Brexit I think it's only fair they pick up the tab.
Flaperon +1
Just had to explain to one of the office brexiters that the increase in fuel prices they're complaining about is a direct result of brexit and the weakened pound.
Muppet.
Is it a case of the majority spoiling it for the minority. At the £50k-£80k professional/middle management level that I see it's all disguised employment but they still want the best state schools, NHS treatment etc. and complain if they don't get it. Of course a lot claim that they're only working through PSC's or umbrellas to give them more control and flexibility...yeah right. IR35 is a complete waste of time so the sooner they crackdown hard on these avoiders the better and if there's a bit of friendly fire in there then blame the avoiders ruining it for the genuinely self employed.
daveky
You too are confusing self-employed and employed.
If you work for a PSC you're employed, and usually an owner. And all together will pay employees NI, employers NI, income tax and corporation tax.
Plus off course any downtime, sickness, etc.
As someone who has been self employed and now runs their own Ltd company the whole NI setup is far to confusing. They should have just scrapped all the levels and set one that everyone pays. Use it as a chance to simplify things.
For those that say it is unfair on the self employed, such is life. Think of all the people without kids that still have to pay for schools.
The rest still applies. I know guys working for the same firm for over 10 years meeting all the tests for employment but still they are paid as contractors. Say the missus is working for their limiteds and pay them £11k plus divis when in reality they're do nothing. It's absolutely rife and it was only a matter of time before something needed doing. Unless they're involved most uninformed people don't know what's going on and think it's just an alternative choice to employment while they're sat there on PAYE paying the Contractor's state pension contributions. It's looking as though the Government might row back on this one scared of the voter backlash. That tells you a lot about the levels of avoidance going on. I thought these small rises in tax will likely be wiped out by the reductions in corporation tax to 17% over the next few years anyway.