Tax cut for self-employed workers scrapped
A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government.
It said Class 2 National Insurance contributions would not now be abolished in this Parliament.
It cited concerns that low-earning self employed people would end up paying more to access the state pension and it would make the tax system more complex.
The Federation of Small Businesses said it was "extremely disappointing" and would hit more than 3m people.
The government was originally due to scrap Class 2 NI contributions, paid by self-employed people with profits of £6,205 or more a year, in April 2018 but last year announced it was delaying that for a year.
But it announced on Thursday that they would not now be abolished in this Parliament - something the FSB says will "net the Treasury more than £350m annually in the three years to 2021".
In a written statement, it said the change had been intended to simplify the tax system for the self-employed but it had "become clear" that a "significant number" of self-employed people with the lowest profits would have ended up paying more.
"Having listened to those likely to be affected by this change, we have concluded that it would not be right to proceed during this Parliament, given the negative impacts it could have on some of the lowest earning in our society," it said.
https://www.bbc.co.uk/news/uk-45439542
A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government.
It said Class 2 National Insurance contributions would not now be abolished in this Parliament.
It cited concerns that low-earning self employed people would end up paying more to access the state pension and it would make the tax system more complex.
The Federation of Small Businesses said it was "extremely disappointing" and would hit more than 3m people.
The government was originally due to scrap Class 2 NI contributions, paid by self-employed people with profits of £6,205 or more a year, in April 2018 but last year announced it was delaying that for a year.
But it announced on Thursday that they would not now be abolished in this Parliament - something the FSB says will "net the Treasury more than £350m annually in the three years to 2021".
In a written statement, it said the change had been intended to simplify the tax system for the self-employed but it had "become clear" that a "significant number" of self-employed people with the lowest profits would have ended up paying more.
"Having listened to those likely to be affected by this change, we have concluded that it would not be right to proceed during this Parliament, given the negative impacts it could have on some of the lowest earning in our society," it said.
https://www.bbc.co.uk/news/uk-45439542
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