Budget: Government risks lost generation of self-employed Brits, warns tax leader
Ahead of the Budget today, the Chancellor has been urged to resist introducing further tax changes that offer ‘quick wins’ for the economy but deal long-term, or even permanent, damage to the UK’s self-employed workforce.
After breaking a Conservative manifesto pledge in September by announcing the social care levy, which will see national insurance and dividend taxation increase by 1.25 per cent from April 2022, and along with recent reform to IR35 and a significant corporation tax rise set for 2023, self-employed workers and small business owners are being hit hardest by government’s strategy to repair the economic damage caused by Covid.
The warning comes from tax specialist Qdos’ CEO, Seb Maley, who told City PM that “millions of self-employed people and small business owners are bearing the brunt of the government’s post-pandemic tax strategy.”
“Whether it’s the social care levy, IR35 reform or the incoming corporation tax increase, a raft of tax reforms are making things even more difficult for those working for themselves,” he said.
These short-sighted decisions may also deter people from starting businesses, risking a lost generation of self-employed people who would contribute billions to the economy.
Qdos’ CEO, Seb Maley
In recent years, the government has seen the Budget as an opportunity to unveil tax changes that hit the self-employed the hardest, he continued.
“This time, things need to be different. The Chancellor must resist the urge to roll-out knee-jerk tax hikes that land potentially devastating blows to the smallest businesses,” Maley said.
“This isn’t just an economic decision, it’s also a moral issue. Further tax reform that negatively impacts the self-employed, millions of whom did not receive any support whatsoever throughout the pandemic – is not only counterproductive, but is deeply unjust,” he concluded.