Since the general election, the self-employed have been bruised by a handful of measures such as the tax-free dividend allowance cut and the public-sector IR35 reform. There are a few perks on the horizon such as the auto-enrolment pensions scheme, but what about a fairer tax system?
Recent research conducted by Qdos Contractors found that 63% of contractors that were surveyed want Government to focus on rethinking the tax system to make it fairer.
Going back to the General Election 17 run-up, IPSE, Self-Employed and Freelancer Association, recommended in their manifesto that the government should carry out a strategic review of the tax system for the self-employed. They wrote:
“Misjudged policies around IR35, National Insurance and Making Tax Digital have all rightly attracted criticism, as they have hit the self-employed. The government needs a more strategic approach to considering how modern working practices can be addressed in the tax system.”
“This should include a comprehensive review chaired by an independent expert,” which leads us to the Matthew Taylor report which received a mixed response.
Taylor touches the base of this topic in his review by stating that he believes that “treating different forms of employment more equally in the tax system would be fairer, more economically efficient and support better quality work.”
This follows concerns made by Taylor that the tax difference between the self-employed and employees is too big, leaving room for ‘disguised employees’ to reap the tax benefits.
Survey Findings
– 15.5% supported the recommendation that a minister for Freelancers and Contractors should be appointed.
– 10% want Government to make getting a mortgage easier for Contractors and Freelancers. As a self-employed professional, you will take on work as it comes along which means that payment will be made on an ad-hoc basis, making it difficult to secure a mortgage.
– 7% want Government to incentivise pensions for the self-employed
The Tory – DUP coalition government which was formed in June was predominantly economically geared but the self-employed were out of this focus. Growing concerns such as these have been reflected through IPSE’s latest research which found that Contractors’ confidence sunk to its lowest since the index was established in 2014.
Government policy and Brexit have been blamed for ‘pessimism and uncertainty’, just two months after IPSE research found that freelancers are happier than employees.
The following months will bring the future of the self-employed into perspective as the coalition government braces its full power and as the Brexit deal is introduced in greater detail.
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