Spring Budget 2017: Business rates, T-Levels and self-employed tax hike
- Author: Leroy Wright Mar 10, 2017,
Mar 10, 2017, 23:33
But the document for the first time revealed the operating budget of the new Department for Business, Energy and Industrial Strategy, which has a Departmental Resource Budget (DEL) of £2bn a year in 2016-17 and 2017-18, and then falls to £1.9bn by 2018-19 and £1.7bn in 2019-20.
The change will affect all self-employed individuals earning more than £8,060. That is not fair to the 85% of workers who are employees.
"The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone".
'We deal with an terrible lot of owner-managed businesses, people working very hard and taking a big risk ultimately with the roof over their family's heads, ' she said.
Suffolk Coastal MP Therese Coffey, who took a delegation of businesses to the Treasury in the lead up to the budget, said she was delighted the Chancellor has listened to the calls.
Mr Hammond stated that this will reduce the gap between the self-employed and employees, making the system fairer and increasing funds available for the government. The self-employed still lack benefits like sick pay or maternity pay. The self-employed are now excluded from auto-enrolment unless they opt to make their own arrangements. Companies such as Uber and Deliveroo rely on the self-employed status of drivers to avoid paying national insurance contributions.
My only concern is that should United Kingdom activity fall short of the OBR's 1.8 per cent projected annual pace over the next five years, the chancellor's £26bn headroom could disappear very quickly.
The most eye-catching announcements had already emerged - Mr Hammond had told the world about his plans to boost technical education during interviews at the weekend and it had been widely trailed that he would announce new support for social care.
"For too long, the FE sector has suffered from a lack of investment or focus - even though improving the UK's skills base has to be a top priority if we want to improve the UK's productivity and competitiveness", he added.
Instead, both organisations highlighted "dreadful" prospects for earnings, with the Resolution Foundation saying workers pay growth was at its slowest since the Napoleonic Wars, 210 years ago.
"Technical education has been a longstanding weakness in the United Kingdom skills system".
Hammond also pledged £3m towards funding support for Britain's "brightest and best research talent" through 1,000 PHDs and fellowships in science, technology, engineering and mathematics, and confirmed a £40m commitment to promoting lifelong learning.
I feel more pessimistic than the Office for Budget Responsibility (OBR) over this outlook and the impact Brexit will have is highly uncertain.
Hammond used his first budget to drive home the Conservative government's message that the national economy remains stable and resilient despite the uncertainty caused by Britain's vote to leave the European Union. What's more, often this instability is reflected at source in the wages, with a freelance paid a higher rate than a staff member is.