IN HIS spring Budget, Chancellor Philip Hammond announced that National Insurance (NI) contributions for the self-employed in the UK would rise from 9 per cent to 10 per cent in April 2018 and to 11 per cent in 2019, to bring it closer to the 12 per cent currently paid by employees.
However, following strong opposition from the self-employed community in the UK, he’s now decided that it will not go ahead.
The UK200Group is the UK’s leading membership association of independent chartered accountancy and law firms, whose members act for over 150,000 SMEs and private clients. So what do the UK’s accountants think of the U-turn?
Alan Boby, Partner at UK200Group member Ellacotts, said, ‘This is welcome news for the self-employed for now. However, the self-employed should consider if being self-employed is a long term strategy. It is now more important than ever for self-employed individuals to seek specialist tax advice when deciding which business vehicle to use.’
Francis Whitbread, Partner at UK200Group member firm Edmund Carr, said, ‘the Chancellor’s U-turn on the proposed increase in national insurance contributions for the self-employed suggests that those advisers, civil service mandarins or whoever suggested the policy to Mr Hammond in the first place have no idea of what goes on in the real world of SMEs, or what public opinion feels.’
‘I have a nasty suspicion this is not the only case of Mr Hammond being misinformed. I wrote to the Chancellor before Christmas setting out a number of concerns about Making Tax Digital (MTD). I received a reply on his behalf from HMRC assuring me my fears were groundless. In the recently published consultation on MTD the concerns expressed by the accountancy profession over a number of areas were similarly ignored.’
Following on from Francis Whitbread’s comments on MTD, Andrew Jackson, Chair of the UK200Group Tax Panel and Head of Tax at UK200Group member Fiander Tovell said, ‘The proposed NI changes would cost each self-employed person a few hundred pounds; HMRC’s estimates are that MTD will cost each business £280, but this is clearly an underestimate. It would be a great shame if businesses are spared a hike in NI, only to have a more costly MTD burden foisted on them.’