The Spring Budget, announced by Chancellor Rishi Sunak yesterday, has been criticised by the Association of Independent Professionals and the Self-Employed (IPSE). While the Budget addressed the rising cost-of-living and included a 5p fuel duty cut until March 2023, Andy Chamberlain, IPSE Director of Policy said that the Budget announcements “do little to reassure self-employed households.”
Chamberlain said: “With inflation reaching its highest level in thirty years and household bills skyrocketing, the hike comes at the worst possible time for self-employed workers.”
While the Chancellor announced an increase in the National Insurance threshold to £12,570 from July the Budget also confirmed increases in National Insurance Contributions (NICs) and dividend tax. This was met with criticism from the IPSE, which had urged the Chancellor to delay these increases.
“The rise in National Insurance is particularly damaging to those that work via an umbrella company, as these workers are forced to pay the tax twice – as an employer and as an employee. Although the raising of the NI threshold will, to a degree, mitigate the additional burden of this measure, many self-employed taxpayers will still be worse off.” Chamberlain added.
Earlier this year, the IPSE called for the Chancellor to delay the planned increase to National Insurance and dividend tax following the energy crisis. The IPSE stated that the self-employed sector is already struggling with soaring household energy bills, inflation and the impact of IR35, however yesterday’s budget confirmed that the government will go ahead with the planned rise.
According to Chamberlain, the announcements yesterday “don’t go far enough for thousands of freelancers that are recovering from the economic uncertainty caused by the pandemic.”
Author: Steven English
25.03.2022
