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.

I agree with the lowering of the dividend allowance. That seems like a bit of a con anyway. But not sure about the NI contributions. Because self employed people won't have a company pension and they're not entitled to the same maternity and sickness benefits. I also agree with Internation aid being looked at again. As somebody else has mentioned Iif ndia can afford Nuclear they could put the money to better use. It was a bit of a pathetic budget all round I thought.

We could save a nice chunk of change by not giving money to India, they had said they didn't need it back in 2012 and now are saying it again.
www.thetimes.co.uk/article/we-don-t-need-foreign-aid-money-says-indian-envoy-jlb5h27kj
Punishing self inployed and small business isn't the way to go.

I'm sorry but lower ni contributions were probably the only 'perk'
As a self employed worker, I get nobody to contribute to my pension, in fact I don't have a pension, I get no sick pay, nobody gives me holiday pay and I get no maternity pay.
A self employed friend of mine is currently battling secondary cancer, she cannot afford to be off work sick, so she does her best to work and keep her head above water.
I am currently considering returning to employed work as after 8 years, I've yet to discover what is supposedly so wonderful about being self employed.

babyroobs - the problem with the cash in hand economy is that its artificial if people aren't putting things through the business and paying the right taxes. I have reported people and will continue to report people Might make me unpopular but there you go - taxes are there and need paying properly for a reason.

I hate paying taxes same as most people do, but pay to the last penny and always declare all income (a bit pathetic when it comes to dealing with the tax person so always want to have everything spot on!)

I think this idea that we cut back on aid is a bit of a diversion to be honest. I have lobbied my MP over the years to scrap NI but there is never the political will for it. same as when you get a bill and the vat is included. do people realise just how much tax they do pay - road taxes, vat, petrol duty, alcohol duty. when you add it all up its massive. just wish it was more transparent - what we pay to the govt - rather than hidden in a myriad of different taxes

But if your pay same stamp
As everyone else then yes you qualify basic sick and materity pay same as everyone else. You also have option of topping up NI now
So you get these benefits.

There is a cynicism about the Self Employed declaring all earnings in the first place.

I am not convinced that the 2% will make too much difference to a lot of people.

Tradespeople only want to be paid in cash. Many of them are dodging tax and dodging paying maintenance for their children. I think a clampdown is essential here.

I am sure that there are plenty of builders and trades people in my area all working the old 'cash in hand' and also plenty that are paying their way in life and declaring it all.
Its always the ones that pay up and do the right thing that get screwed over whilst the ones playing the system, putting it under the bed and employing their wives/ working a tax dodge are all okay! Life isnt fair and nobody, labour conservative or whoever will ever change the way it is!

Even UKIP have turned protectionist, as they chase disenfranchised Labour voters instead of Tories (though of course they will make political hay out of this).

There is no major political party which aims for a low tax, low welfare entrepreneurial free market economy any more. We see this in the US too with Trump etc. It is a shame.

Name changer - I have a friend whose dh is also being paid in cash then declaring a significantly lower income for tax credit purposes, so win win both ways for him.

I'm self-employed and I declare my earnings. All of them. I'm not happy about the increase in national insurance, nobody likes paying more tax.

I'm a sole trader and I declare everything for tax, I get paid about 60% of my income in cash and I account for it all. I'm way to scared of HMRC to do anything else! And all my cheques and bank transfers go into my business account.

My DH is a self employed contractor so we will be affected by both changes. We work in very different fields and while we're both happy being self employed it does mean neither of us gets paid holiday or sickness...

I disagree that we necessarily need to be a low tax country. We are in serious danger of stagnation because the government is choosing to impose cuts endlessly rather than try to grow the economy and clamp down on tax evasion and avoidance. I'm not desperate to pay more tax, but I cannot accept a society in which we are putting children at risk because the government won't give adequate funding to provision for child protection and disability.

I'm self-employed and I have to look at this in more detail, but many of my self-employed friends are annoyed. I do not mind being taxed the same - I think that's fair - but I do mind that I do not get equivalent benefits from the taxation system as people who are employed. Childcare vouchers, for one - as a working mum my childcare is a major expense, as it will be for many here; maternity benefits, for another (no minimum 90% of earnings for 6 weeks as my employed friends had). I have had colleagues complain about the bike scheme, although I don't cycle so that doesn't impact me. No sick pay equivalency scheme (e.g. offsetting days lost through ill-health), no employers contributions on my pension payments. So the other side of the deal seems unfair. Also, whilst there are self-employed people who seek out to be paid cash, many do not. I never accept transactions in cash!!

But if your pay same stamp

Please stop talking about "paying a stamp". We have not bought stamps from the Post Office and stuck them to cards to make NICs since 1975 - 42 fecking years ago. Or do you still talk about "listening to the wireless"?

MovingOnUpMovingOnOut - of course it isn't Utopia, didn't mean to suggest it was. But the positives outweigh the negatives and if they didn't I'd go back to employment. My comment upthread about never having to sit through another appraisal was tongue in cheek, but I do prize being autonomous very much. It's not all about the balance sheet.

Maybe I am an animal spirit after all Still ain't no bloody Tory though!

The self-employed are risk takers. They are self-reliant. They are natural Tories.

Humans are not naturally self-reliant - we evolved living communally.

Thank you for confirming that being a Tory is unnatural.

Also, the obfuscation about Class 1 vs Class 4 in relation to the manifesto is the worst type of buck passing.

It would be much better if they just admitted they are breaking the manifesto pledge - they could easily make up a plausible sounding excuse.

I agree with Isabel Harding:
blogs.spectator.co.uk/2017/03/philip-hammond-brews-trouble-national-insurance-hike/

Why on earth shouldn't they pay the same?

Why on earth shouldn't they pay the same?

Because we aren't the same. No sick pay. No pension. No holiday pay. None of the extras which many other employers offer like childcare vouchers or travel card subsidies.

that assumes that everyone chooses to be self employed.

Those who have no choice will be paying 11% NI after this change is fully implemented, compared to 12% that employees will be paying. The government also gets a further 13.8% in employers NI in respect of employees, so self-employed still have their labour taxed at a much lower rate than employees.

Employer pays out £100 that falls in basic rate band, employee takes home £60. (£12 goes to employer NI, of £88 gross salary £28 goes in basic rate tax and employee NI.)

Client pays out £100 to self-employed person, worker (after this change) takes home £69.

Im not sure putting it in the same time as the business rate rise is a good idea, haven't they also reduced the criteria for what counts as a small business?
So actually, it could actually put people under.

longfingernails I have been successfully self employed for eleven years and have never voted Tory in my life. (Or Labour, actually).

However it does really piss me off when I see this attitude often on MN that the self employed pay virtually no tax and dance from loophole to loophole. With NI I pay about 30% on my modest earnings. And no we don't get sick pay, pensions, holiday pay, employers' contributions, paid mat leave. My accountant is not constantly looking for ways for me to avoid paying tax - he's a straight down the line, grey, thorough sort of man who I trust. And that's why I pay him.

Yeah, I bloody love the flexibility of being self employed, that feeling when I wake up feeling really lousy with flu that I can CHOOSE whether to go to work and be paid, or do what my body tells me and stay in bed and forgo my pay.

That flexibility to choose to earn no money when I want to go on holiday, or to take no holiday and continue to earn.

That brilliant flexibility that allows me to stop earning tomorrow if the work dries up with no redundancy.

That amazing flexibility that means I have no employer topping up a pension fund.

Great isn't it, I positively rejoice at the chancellor's decision to take more money from me in return for nothing.

And fwiw, I don't have an accountant, just do my SA form like everyone else, no loopholes, just pay the money.