From City AM:
How did people react to the National Insurance hike?
Sam Dumitriu at the Adam Smith Institute said: “It’s right to bring National Insurance on the self-employed in line with that paid by employees. But the chancellor must ensure he is not discouraging the self-employed from investing, and allow them to immediately deduct capital expenditures from their taxable income...
LOLZ! has he not heard of the Annual Investment Allowance, which means that most small and medium-sized business can claim 100% of their capital expenditure in the first year? (This is some nonsense dreamed by Georgon Osbrown: reduce the normal capital allowance rate to a miserly 18% (or 8%) but then give most businesses a 100% rate anyway).
... We shouldn’t be looking to increase the overall tax burden, especially not on low-income workers. So we should use the extra revenue raised to cut the overall National Insurance rate.”
If he means align the NIC rate on employees and self-employed, they've got a long way to go (10% vs 23% on the first £43,000), even further if they look the rates above that (2% and 14%) and even further if they look at the NIC rates on investment and rental income (0%). But the Annual Investment Allowance (which is only a timing thing anyway) is bugger all use to low-income self-employed who probably don't incur much capital expenditure.
To give Philip Hammond credit, he did point out that employees pay/suffer two layers of NIC and IIRC, referred to it as a "tax".
Thursday, 9 March 2017
From City AM: