The Conservatives’ last general election manifesto explicitly ruled out rises in National Insurance, VAT and income tax during the lifetime of the current Parliament but ministers argue that legislation enshrining the manifesto commitment in law approved by Parliament in 2015 referred only to National Insurance contributions paid directly by employers and their employees. The Tories have certainly had a change of heart and the self-employed are the ones feeling the pinch the most.
Jeremy Corbyn has branded budget 2017 as ‘complacent and ‘out of touch’. We all knew something outrageous was about to happen when the Prime Minister, Theresa May looked to the sky and proceeded to do the most devilish laugh/chant in the history of parliament. Prime Minister Mrs May defended the change as “fair”, amid a backlash from some Tory MPs and newspapers. But she said it would not be voted on until after proposals for extra rights for the self employed was published. Translated “until we forget and move on” to something else and then it will be passed under the radar. The review of modern employment practices by RSA chief executive Matthew Taylor is already set to be published in the summer. Our National Insurance which is designed as a contribution towards state benefits and services such as the NHS, unemployment benefits, sickness allowances and the state pension are one of the areas with many changes that will affect several small business owners. The self-employed currently pay a lower rate than those in employment. The government says this was traditionally down to a lesser entitlement to benefits and pensions, but that these disparities have mostly been removed, so the difference in rates is unfair. But most entrepreneurs say it is justified because self-employed people are not entitled to things like paid holiday and sickness leave. At a press conference at the EU summit in Brussels, Mrs May said the change would leave “lower-paid self-employed workers better off, it’s accompanied by more rights and protections for self-employed workers and it reforms the system of National Insurance to make it simpler, to make it fairer and to make it more progressive.”