A Tory Chancellor has just abandoned the self-employed

[longfingernails]

Hammond has raised class 4 NICs and cut the dividend allowance. AIBU to believe this is unacceptable. We need to be a low tax capitalist country which does everything to encourage entrepreneurs, whose animal spirits aren't dampened by high job taxes.

We should instead cut NI for all employers/employees. An easy initial cost saving is cutting international aid. We can also improve efficiency in public services through greater private provision, reducing the benefits cap, etc.

There is scope for self employed to play the system and use the rules to pay less tax pound for pound than an employed person. The employed person just has to pay up. Even with the increase in NI, I am pretty sure the accountants will find a way to mitigate this so they won't be out of pocket.

I know self employed people who actually gloat about their low tax bill, which I find infuriating. Especially those who are 'employing' their wife and buying things like laptops for their kids and family through the business.

I have not read the whole thread... but the change to class 4 NICs will cost someone earning over £43k £350 per year.

I think they will cope!

it is very hard to generalise but loads of people are self employed and on low earnings and woudl rather be employed - all those delivroo drivers, uber drivers, cleaners on cleaning apps and the like. Then you do have some higher paid epxerts but even those often had to work for themselves because they are too old to get jobs and would prefer a full paid employed role.

There are a lot of myths out there that the self employed avoid tax. I pay loads of tax and have a lot of expenses I just cannot avoid. it's tough and you have to do all the paperwork and admin.

No sympathy, all workers should pay the same whether employed or self employed.

I'd imagine the majority of SE used tax and expenses to their advantage. People on here admit to paying themselves minimum wage so that they can claim state support, putting a spouse on the books to cut costs etc

We should be tightening up on the SE nevermimd just bringing costs in line.

Maybe the benefits should be brought in line too then?

People on here admit to paying themselves minimum wage so that they can claim state support

How would that work if you have a business making a profit above minimum wage?

Alternatively, we could make is so that the state takes all the money from our earning - regardless of employment status, and then redistributes it back to us.

Sounds quite revolutionary. I'm surprised it's not been tried before ...

I have not read the whole thread... but the change to class 4 NICs will cost someone earning over £43k £350 per year. I think they will cope!

Anyone earning over 16k will be worse off as a result of this. This is not a high income, especially when you factor in the need to plan for holidays/sick days etc.

I doubt the majority of self-employed people use tax and expenses in any dodgy ways - we are liable to be audited, for one thing. But lots of us are just ordinary people providing services that aren't available through schools or hospitals or whatever - music teachers, tutors, therapists, all sorts of things. There is huge uncertainty to the job and income, no sick pay, no holidays, no benefits, none of the things that NI goes some way to paying towards. So while it's a change and people like me will accept it, this idea that people should have "no sympathy" for a group of people who now have to pay more tax is a bit unfair, and suggests that we have somehow been benefiting from the situation in an underhand way. My prices may well go up, so my services will be available to fewer children, and only those of better off parents, which I think is a shame. I didn't go into this for the money, but because it is the only realistic way to provide some of the services I can do, as there isn't the funding through schools, for example, for them to pay for it and offer jobs.

I don't know exactly what it will cost yet; the online thing that I looked at suggested that it would be more like a thousand, rather than a few hundred, for people earning say £30k., but I'm not entirely sure yet. That is a noticeable difference.

"Animal spirits"!?

Are you on glue!!??

😳😳🙄

I agree HemiDemiSemiquaver, it seems to be the only acceptable group to accuse of fraud on here

Just increase your rates in a quiet sort of way to compensate

How do you increase your rates in a quiet way?

I put that's little wildly, it depends on what your business offers. Fully appreciate that there are many out there where the job is that way and you have no other choice.

However there will be those that remember especially in building and the engineering industries in the 90's that the government backed the idea of these traditional occupations going away from being directly employed and every job became either 715,limited company, umbrella all through agencies, no holiday no sick no subsistence etc.

However there was a change in fortunes, and now they want to u-turn on it.

I have seen all these threats before you will still be better off self employed than paye. It depends on the value you put on the benefits of being an employee.

I offer a service that is price sensitive. I could add a couple of £s to it - and I might still get 100% take up as I have limited places available.

But. people might not take up the places as I might become too expensive. Or I could be a real bargain now and am underpricing myself.

However, I do offer a pretty unique service.

This is the 'joy' of self employment - knowing the price to set yourself at, being uncertain about whether to increase it, and also not knowing if the demand is out there.

I think I am going to increase my available places. That will compensate for any changes to dividend tax.

If I increased 1 of my prices on my major service, I think I would lose it.

Seems saner voices are prevailing, and this measure is being kicked into the long grass, hopefully never to be seen again.

It's time that Hammond and May started acting like Thatcherites instead of Blairites.

That's definitely what the country needs at the moment. Some Thatcherites in charge so they rein in the bastard unions and cut back the State to the bone.

Oh yes, it's already been done...

So you can pay yourself holiday pay

Er... no you can't. If you are (say) a self-employed childminder, dogwalker or cleaner who charges an hourly rate to your clients, then if you go on holiday you earn nothing, because you aren't there to do the work to earn the money are you?

If you don't work, then you don't get paid. Christ, why can't people get their heads round this simple fact?

If you don't work, then you don't get paid. Christ, why can't people get their heads round this simple fact

This - imagine a company telling you that you had to have 6 weeks holiday but they wouldn't pay you for that - or they would lower your salary by 6 / 52 weeks.

I know I don't get paid for holidays. I get over that by just looking at what I earn and telling myself that is the salary I am on. I am 'in a job' where I take home this amount of money after tax and I get 6 weeks (I wish) holiday a year. I could earn more money by not having a holiday and that would increase my take home pay but I wouldn't get a holiday.

On the 'I don't take cheques' point at the beginning of the thread.

Isn't that sometimes because of the risk of bouncing cheques, and the (time) cost of getting to bank during the working week? Plus bank charges for cheques.

I use Paypal a lot - and that's great but expensive. I can do cash in my business but I need to know people have paid as it's bookable in advance.

Once you start using banks, visa etc, people take their cut.

If you don't work, then you don't get paid. Christ, why can't people get their heads round this simple fact?

If you take in £2000 a month but take one month a year off, one way to look at it is that your monthly "salary" is 11 x 2000 / 12 = £1833.33. Where you are going wrong is that you think your "salary" is £2,000 and that you are losing £2000 by going on holiday.

To be fair, it's not a question of right and wrong, just two different ways of looking at it. You are not understanding what is meant by a self-employed person paying their own holiday pay.

Holiday pay is an employment benefit worth something, therefore if you as a self-employed person are comparing yourself with someone who earns the same per day, but has that benefit in addition, you are actually comparing yourself with someone who earns more. You need to deduct the cost to you of setting money aside to fund holiday pay from your self-employed earnings, what is left over is the earnings that can then be compared with what an employee gets.

The difference between a self-employed person and most employees is that the self-employed are more likely to have a choice between holiday and money, and that choice is psychologically uncomfortable.

Most employees have a set amount of holiday allocated, they don't have the option of getting more money by not taking holiday, or indeed reducing their income by taking extra holiday. It's psychologically much easier not to have to choose between two things.

If you take in £2000 a month but take one month a year off, one way to look at it is that your monthly "salary" is 11 x 2000 / 12 = £1833.33. Where you are going wrong is that you think your "salary" is £2,000 and that you are losing £2000 by going on holiday

That's how I rationalise it. My 'salary' includes my holiday.

Most employees have a set amount of holiday allocated, they don't have the option of getting more money by not taking holiday, or indeed reducing their income by taking extra holiday

I know some NHS consultants get extra money by doing private work during their annual leave - so they get paid for annual leave AND get paid for doing private work.

I think that is fine if that is what they want to do - my issue would be to do with holiday is meant to be time to recover and refresh...

My main concern with Self employed NI is that the SE are not entitled to the same benefits as employed - no ssp for instance, currently retirement is 75 for se and these were the compromises for keeping NI low - change this and there is a case to argue that these should be equalised as well. Shortsightedly they are not looking at the longer term costs again

I think that is fine if that is what they want to do - my issue would be to do with holiday is meant to be time to recover and refresh...

My main concern with Self employed NI is that the SE are not entitled to the same benefits as employed - no ssp for instance, currently retirement is 75 for se and these were the compromises for keeping NI low - change this and there is a case to argue that these should be equalised as well. Shortsightedly they are not looking at the longer term costs again