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Today’s Top Headlines

UK Budget Likely To Feature Self-Employment Tax Reforms

by Jason Gorringe,, London

02 March 2017

The UK Government is expected to announce changes to the tax rules for self-employed people in the UK's imminent Budget announcement.

Discussing the prospect of changes, the Association of Independent Professionals and the Self Employed (IPSE) said that the Government considers there is a need to tackle the growing disparity between workers who pay tax using the pay as you earn (PAYE) system, the self-employed, and those who operate 'personal service companies.'

IPSE said "the Government must proceed with caution." It said that freelancers contributed GBP119bn (USD146bn) to the UK economy in 2016. "Any changes to the tax system must be carefully considered or will run the risk of damaging one of the UK's principle competitive advantages – it's flexible labor market," said Andrew Chamberlain, IPSE Deputy Director of Policy and External Affairs. "IPSE looks forward to working with the Government to make a fairer tax system [that] is up-to-date with modern working practices."

Withers LLP, the international law firm, also consider that changes to rules for self-employed persons are likely. Discussing the measures that might potentially be announced, Chris Groves, Partner in Withers's Private Client and Tax team, said: "Despite the rumors of higher-than-expected tax receipts, there appears to be no let up to austerity and the expectation is that [Chancellor] Philip Hammond will look to new measures to increase revenue. Inheritance tax is one of the hottest topics. The funding of social care in later life is prominent and there are good odds on an increase in inheritance tax or some other levy on death being introduced to fund care in later life. Equally there is pressure for an increase in the nil rate band, which has been frozen at GBP325,000 since 2009. Also likely is an increase in the tax burden of the self-employed as the government looks to bring more of the 'gig economy' into the mainstream tax system."

TAGS: inheritance tax | tax | United Kingdom | individual income tax | Professionals | Tax

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