Thursday, 11 October 2018

"Hammond plans tax crackdown on synthetic self-employed"

From the BBC:

The Treasury is finalising plans to overhaul tax rules which allow self-employed people to avoid paying national insurance contributions. The move will be targeted at people who set themselves up as private companies to take on work.

The BBC understands it could be announced in this month's Budget. The Treasury believes a third of people claiming self-employed status as a "personal service company" are actually full employees and should pay more tax.

Quite simply, employment income is taxed at insanely high rates. Self employment income and income routed via a company are just taxed at high overall rates.

So this is bound to happen, and anybody who thinks they are on the right side of the line will do this. And plenty of people who clearly aren't. Presenting a regular daily or weekly TV or radio show is slap bang in the middle of any sane definition of 'employment' FFS.

The answer is simple. Merge VAT, National Insurance, income tax and corporation tax into a single rate of tax applied to all earned income at the same rate. You can make it less regressive with a personal allowance or a Citizen's Income credit.

Until and unless they do that, this sort of tomfoolery will continue and we go in ever decreasing circles.

It says without reform, high levels of non-compliance with tax rules could cost HM Revenue and Customs, which collects taxes, £1.2bn a year by 2023.

Sod off, it costs HMRC nothing. That's like me counting all the goals I never scored in a Cup Final. It costs 'everybody else' £1.2 bn, because they have to pay in more to make up the difference.


Striebs said...

I spent 13 years as a sole trader rather than limited company so paid a reasonable amount of N.I.C.

It was either self employment or unemployment and I never cheated my figures .

This has got little to do with money or people paying their way .

Unimpressive louse spreadsheet-fool Hammond is transparently trying to steal some of Labours thunder by showing how much the Conservatives consider self-employed the enemy of the state too .

The Russian bogey man narrative didn't work so now they are going to try and blame societies ills on the self employed .

Bayard said...

I fully except to see that lots of people who are borderline self-employed will be clobbered, but the real piss-takers, most of whom work for the NHS or the BBC at a senior level will be left untouched.

Mark Wadsworth said...

Str, agreed. But " a reasonable amount of NIC" is precisely nil IMHO, it's a shit tax and secondly, you still paid less than half as much as on employment income. The main thing is HMRC aren't bothering you, really.

B, they started with NHS and BBC first, they have been applying the rules much more strictly to them for a year or two.

Striebs said...

MW ,

Quote "Still paid less than half as much as on employment income"

I take it you are (quite correctly) including "employers" NIC .

Another thing which gets me is that all these grandstanding speeches and policies (e.g. Labours proposed "Inclusive Ownership Fund" ostensibly for employees but in effect part nationalisation) assume everyone and every company operates in trivially simple situations , within national boundaries , simple corporate structures etc .

They fall down hopelessly when exposed to real world complexity . It makes you wonder what world and what century the people articulating those policies think other people are living in .

Dinero said...

Regarding the tax revenue and expenditure as in

"Costs the Treasury"

or even

"it costs 'everybody else' £1.2 bn, because they have to pay in more to make up the difference."

If the people that start paying the NICS start claiming pensions and sick pay to the same value then the treasury's funding stays the same.

Mark Wadsworth said...

Str, yes Er's NIC included.

Re employee share ownership, even if this were a good idea it is clearly administratively unenforceable for the reasons you give.

Din, good one!

Lola said...

Well, as regards NHS (e.g.) no-one working for it 'pays' any tax anyway.