The self employed do not pay enough tax!

[WishfulThanking]

On the sticky post about the Pregnant and Screwed campaign on the AIBU board, lots have posters have said they absolutely do not support the demand for self employed people to be allowed access to paternity leave. On questioning, it is because people believe that the self employed don't pay enough NI/tax. I asked somebody to show me their sources for these beliefs and I received the following as a reply:

Here is the national insurance contributions for the self employed: www.gov.uk/self-employed-national-insurance-rates

Here are allowable expenses: www.gov.uk/expenses-if-youre-self-employed

Here are capital gains taxes: www.gov.uk/capital-gains-tax/rates

So a self employed person making say £100k a year is able to deduct expenses such as travel costs including the cost of a car, which are significant costs that employees have, and pay a max rate on national insurance of 9% and 20% capital gains tax.

Meanwhile an employee making £100k a year is paying tax on $88k and the blended income tax is about 30%. Then the employee and employer portions of national insurance are also much higher with the government collecting 13.8% with employees paying about 5%.

So I would hope this illustrates just why the self employment tax is unfair. The rates should be the same. Why should someone self employed pay 29% while an employee making the same money is paying about 45%.

Can anybody on here report if this is accurate?

I think you have misunderstood your sources. Capital Gains is a tax on the disposal of higher value assets.

Any expenses the Self Employed are entitled to must be wholly and exclusively related to the business. Any expenses for cars etc must be apportioned between business and private use. If you are self employed as a dentist for example you won’t be able to claim the costs of travelling to work each day at the same practice and will apportion the cost of the car for private use.

There is not a flat tax rate either - you earn more you go into the higher tax bracket whether self employed or employed.

Also I consider the lower tax payments to offset some of the risks of being self employed.....I am employed myself too!

You don't seem to understand how businesses operate. If someone turns over 100k before expenses, that's the turnover and not income.

For example, you run a shop and sell goods worth 50k in a month. That's the turnover as you need to deduct the cost of renting the premises, ulitilies, cost of products, staff etc. For Example, 5k, 1k, 35k, 5k respectively. That means that you've actually earned 4k that you'll pay tax on.

You clearly don’t understand how it works as above everting business related has to be proven and there also needs to be some reward for risk.

Do the self employed get maternity leave?

Sick pay?
How many days annual leave do they get?
Bank holidays?