Rishi Sunak crushes Britons self-employment dreams with tax rise


Rishi Sunak crushes Britons self-employment dreams with tax rise

RISHI Sunak has been accused of crushing the dreams of self-employed Britons after announcing the National Insurance tax rise will go ahead

On Sunday, Prime Minister Boris Johnson and Chancellor Rishi Sunak announced the planned £12 billion rise in National Insurance will go ahead in April. They said the increase was the "right plan" and "must go ahead" despite opposition.

The Government has said the changes, announced at last year's Budget, are expected to raise £12bn a year.

Under the new plans, employees, employers and the self-employed will all pay 1.25p more in the pound for National Insurance from April 2022 for a year.

Now, experts have warned the rising living cost and increasing taxes have forced those self-employed fleeing back to nine-to-five jobs.

But recent changes to the tax rules that govern freelancers, known as IR35, have made companies more reluctant to hire self-employed workers.

Derek Cribb of Ipse told The Telegraph: "The sad truth is that the sector has started 2022 in a highly fragile state and if it is going to recover its pre-pandemic growth after omicron, then the Government needs to intervene and ensure that damaging and confusing legislation like IR35 is properly reviewed and that the conditions are right for recovery.

“With the virus hopefully soon under control, the Government needs to turn its head towards self-employed workers.

"The planned increase in National Insurance as well as the cost-of-living crisis are set to further damage freelancers at a time when they are finally in a position to recover post-pandemic."

Some of the sectors where self-employed numbers dropped the most were in "artistic, literary and media occupations.


Figures in these sectors fell 14pc to 259,000 while construction and building trades numbers dropped 10pc to 366,000, according to figurses by trade body Ispe.

The Government defended its support for freelancers, saying it paid out £30 billion in self-employed income support scheme grants.

Announcing the increase in an article in the Sunday Times, Mr Johnson and Mr Sunak said the rise - which applies to employees and employers - will help clear the NHS backlog.

Mr Johnson and Mr Sunak described themselves as "tax-cutting Conservatives" and "Thatcherites".

They added: "We believe passionately that people are the best judges of how to spend their own money."

Under the new increase, an employee on £20,000 a year pay an extra £89 in tax while someone on £50,000 will pay £464 more.

From April, people earning under £9,880 - or £823 a month - will not have to pay National Insurance and will not have to pay the new levy.

This comes as household budgets are under pressure from rising energy prices and food bills.

Inflation is at a 30-year high after the coronavirus pandemic and the energy price cap is expected to increase, possibly raising bills by 50 percent.

Mr Johnson and Mr Sunak countered this by setting out the challenges that the levy will seek to address, writing: "We must clear the backlogs with our health and social care plan, and now is the time to stick to it.

"We must go ahead with the health and care levy.

"It is progressive: the burden falls most on those who can most afford it."


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