Rishi Sunak risks major self-employed fallout as Chancellor delivered ‘yet another blow’ | Personal Finance | Finance


Rishi Sunak says ‘all support will be reviewed in budget’

The Chancellor is continuing his search for a way forward to recoup funds after the Government spent around £280million to help provide vital support to employees and businesses since the COVID-19 crisis erupted. It has been suggested both pensioners and self-employed business owners and workers could bear the brunt of helping clear the massive hole in the economy. Experts, such as George Bull from RSM, have claimed Mr Sunak will likely target self-employed workers’ national insurance contributions.

But commentators were furious, as it emerged millions of freelancers, landlords and company directors could be faced with interest charges “if they break down their annual tax bills” into cost-effective monthly payments.

It was described as “another kick in the teeth” for those listed, with some in the industry arguing they had been excluded from help and “received less generous state support than employees”.

Sarah Coles, of Isa provider Hargreaves Lansdown, said self-employed workers “have got used to bad news during the crisis”, particularly as the Government’s support packages “come with caveats that exclude millions”.

She added: “It’s yet another blow to discover that when the Chancellor announced they could spread their self-assessment payments over 12 months, he didn’t make it clear that they’d pay for the privilege.

Rishi Sunak risked major self-employed fallout as Chancellor delivered 'yet another blow'

Rishi Sunak risked major self-employed fallout as Chancellor delivered ‘yet another blow’ (Image: GETTY)

Rishi Sunak launching the Eat Out to Help Out scheme

Rishi Sunak launching the Eat Out to Help Out scheme (Image: GETTY)

“It adds insult to injury for those who have been struggling with a system that has seemed stacked against them from the start.”

From October, approximately 11 million people who pay their taxes in full were eligible to submit an online application to spread their payments – due in January – across monthly instalments.

This came as a result of HM Revenue & Customs increasing its Time to Pay payment scheme threshold from £10,000 to £30,000.

At the time, Mr Sunak claimed this would allow freelancers and self-assessment taxpayers a “more flexible approach” to offer them “breathing space” during his winter plan.

JUST IN: Brexit news: Close tax dodges to raise £15bn a year, Boris urged

Personal finance: Rishi Sunak alongside Boris Johnson

Personal finance: Rishi Sunak alongside Boris Johnson (Image: GETTY)

Yet, what was unclear was those using this payment plan would in fact be charged 2.6pc interest on their outstanding debts from this month.

Previously, taxpayers could defer July tax bills until the end of the tax year without facing a fine.

Although Dawn Register, from accountants BDO, argued the increased threshold “would make life a little easier” for some, she admitted it was “effectively a loan from HMRC”, and that “they are not going to lend money for free”.

DON’T MISS:
Rishi Sunak favourite to replace Boris – with Rees-Mogg in second [ANALYSIS]
Rishi Sunak tax raid fears as pensioners warned of ‘harsh increase’ [UPDATE]
SEISS replacement: TIGS Scheme creator calls on Rishi Sunak to change [INSIGHT]

Rishi Sunak at a press gathering during pandemic

Rishi Sunak at a press gathering during pandemic (Image: GETTY)

Concerns for the self-employed have consistently been raised since the pandemic erupted in March, with the UK plunged into its first lockdown.

Fears self-employed business owners and workers would be the one “paying a price” emerged the likes of Mr Sunak grappled with the huge hit the economy took.

Yet, since then, many in the self-employed sector have been left out of the Self Employed Income Support Scheme (SEISS) due to the strict measures it employs.

It was confirmed a fourth SEISS grant will now be put in place which will cover February until April 2021.

But when it first began, Mr Bull issued a fearful message to the Government, and how they could cripple the industry.

Boris Johnson and his Cabinet at the start of the pandemic

Boris Johnson and his Cabinet at the start of the pandemic (Image: GETTY)

He said last year: “The Chancellor makes it clear beyond doubt that he is now thinking of applying the same NIC regime to employees, the self-employed and other workers.

“It looks as though it will come at the price of higher future NIC contributions.”

In his announcement for the initial support scheme for self-employed workers, Mr Sunak “hinted at tax rises”, admitting there “is currently an inconsistency in contribution between self-employed and employed”.

But many inside the Conservatives were unhappy with the Chancellor, with one warning there could be “a rebellion” amongst the party over his handling of self-employed workers.

One disgruntled MP said earlier this year: “Self-employed workers have had a pretty rough deal and the idea that Sunak would now choose to make it even tougher for them seems perverse.

“Most people do not like the Treasury’s continual and institutional obsession with increasing tax on self-employed people.”





Source link

Comments are closed, but trackbacks and pingbacks are open.