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Disparities between the self-employed and employed still need to be addressed, says ICAEW

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.”

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