Ahead of the Budget (Wednesday 27th October), the Chancellor has been urged to resist introducing further tax changes that offer ‘quick wins’ for the economy but deal long-term – even permanent – damage to the UK’s self-employed workforce, outlined tax specialist for the self-employed, Qdos.
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% 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.
Qdos CEO, Seb Maley said, “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.
“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.
“In recent years, the government has seen the Budget as an opportunity to unveil tax changes that hit the self-employed the hardest. 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.
“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.”