Wednesday 15 March 2017, Giving reaction to the Chancellor’s decision not to go ahead with National Insurance Contribution increases for the self-employed, Frank Haskew, Head of ICAEW Tax Faculty, said:
“While the increase in the NIC Class 4 rate has been stopped due to a manifesto promise, it was clearly part of a strategy to reduce the differences between the amount of tax (including NIC) individuals pay depending on the business structure they adopt. The fact that the rises have been canned a week after they were announced shows the need for a clear and sustainable tax policy on the self-employed.
“With working practices and employment patterns now very different to how they were in the past, the time is right for a thorough review on the questions of how the self-employed should be taxed and what should be the correct balance of fairness between the tax systems for the employed and the self-employed. Matthew Taylor’s report on the future of employment, due in the Summer, needs to provide a clear strategic direction on these questions and make recommendations to help fix some of the long-term disparities between the two systems.”