Take part in our new Family Business Survey and have your say! Click here
Not surprisingly the Government has recognised the disparity between employed income and self-employed income.
The Chancellor referenced tax avoidance in his speech, stating there was some evidence, from reports compiled by Matthew Taylor, that people would choose self-employment over employment due to the tax benefits. The Chancellor, whilst not agreeing with his predecessor on the reasons behind abolishing Class 2 National Insurance, did agree it will still be the right thing to do and from April 2018 Class 2 National Insurance will be abolished.
It was also originally announced that there would be an increase in the main rate of Class 4 National Insurance Contributions, however, on 15 March 2017 the Government have advised that they will not proceed with this planned increase as it contradicts their 2015 Manifesto pledge.
Announcements on the tax treatment for a Director shareholder of a company, versus self-employed owners, have also been made. Changes to the tax system for the self-employed are unlikely to end here. Alongside Matthew Taylor’s review into employment practices i.e. is it better to be self-employed or employed, the government will consider whether there is a case for greater parity in parental benefits between the employed and self-employed, which would no doubt have to be paid for?
Further consultation will take place in the summer, so we should expect further changes perhaps, in the new Autumn Budget.
All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.
Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.
Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW
Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW