Campaigners for the self-employed have expressed anger over the government’s decision to scrap a planned tax cut for self employed workers.
IPSE (the Association of Independent Professionals and the Self-Employed) said the decision not to get rid of Class 2 National Insurance contributions was a betrayal and suggested the Government had “turned its back on the self-employed”.
The scrapping of Class 2 NICs – originally announced in the 2015 Summer Budget – had been delayed a year to April 2019, but in a written statement released yesterday, Exchequer Secretary to the Treasury Robert Jenrick announced the Government would not proceed with abolishing the tax during this parliament.
IPSE estimates the tax cut would have saved self-employed people around £150 a year.
Andy Chamberlain, IPSE’s Deputy Director of Policy, said: “This decision to backtrack on a pledge to abolish Class 2 NICs – a awkward levy which applies only to the self-employed – is a fundamental breach of faith with the sector.
“This Government-led attack on the self-employed is the latest in a barrage of bad decisions which has left our smallest businesses feeling helplessly abandoned.”
The Government said it had taken the decision because of concerns that low-earning self-employed people would pay more to access the state pension and it would make the tax system more complex.
IPSE also expressed anger over media reports that Treasury officials have told business leaders that the Chancellor is planning to cut The New Enterprise Allowance scheme that is designed to help people start their own business.
IPSE says the Government had regularly praised the success of the scheme and that it has helped over 100,000 Britons start their own business since 2011.