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Budget announced: Self employed face insurance hike

Self employed workers will face an increase in National Insurance contributions, the Chancellor Philip Hammond has announced.

‘The self-employed were the biggest losers’, according to IPSE, an organisation representing self-employed and professional freelancers and contractors.

There will be a 2 percent increase for self-empoloyed National Insurance Contributions by 2018, and the allowance from Dividend Tax will be reduced from £5,000 to £2,000.

The Chancellor said: “Employed and self-employed alike use our public services in the same way, but they are not paying for them in the same way.

“The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone. That is not fair to the 85pc of workers who are employees.”

Chris Bryce, IPSE chief executive, commented: “If you are one of the hardworking self-employed people who face a significant increase on your tax bill, you might feel that the Chancellor has it in for you.

“When you look at the additional support offered for business rates it appears as if the Chancellor is supporting SMEs by hitting entrepreneurs and the smallest of businesses.

“Adding in the reduction in Dividend Tax allowance, whether you work as a sole trader or through a limited company you will be facing higher bills. The Chancellor shouldn’t forget that growth in self-employment has driven our labour market in recent years and punitive rises in tax will make many people have second thoughts about striking out on their own.

“It’s entirely right for the Chancellor to look at taxation of the self-employed, but changes should only come after a thorough consultation with the business community, which has not taken place.”

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