Anyone who is self-employed in the UK should be preparing for increased national insurance rates, possibly at the same rate as employed taxpayers, according to Mark Collins, Head of Tax at Handelsbanken Wealth Management.
According to a report in the Express, the tax specialist said increasing certain tax rates could be on the cards for the long term.
Freelancers, especially solopreneurs, could be the biggest losers in any tax grab, especially if they fall or are pushed into ‘inside’ IR35 territory or are among the millions of self-employed that have not been eligible for government support throughout the pandemic, more popularly known as the #ExcludedUK.
In an effort to ‘equalise’ tax contributions and taxpayer support between the salaried, self-employed and business owners either through tax hikes and/or tax mechanisms, such as IR35, the Chancellor’s stance is arguably and inadvertently already instigating the death knell for the country’s freelancers alongside a spree of solvent businesses closing up shop, as previously reported by The Freelance Informer.
A review commissioned by Chancellor Rishi Sunak last year has recommended increasing capital gains tax rates to bring them in line with income tax rates, which could effectively double the cost of selling shares in companies, the Financial Times reported.
There have been reports of company founders and senior executives having sold down stakes in businesses ahead of the March tax season. Some owners are still contemplating selling their entire business.
To see what new rates you may have to pay if national insurance was equalised, check out this article:
What National Insurance do I pay if I am self-employed? | Low Incomes Tax Reform Group (litrg.org.uk)