Stride slammed for self-employed NICs answer

A Treasury minister has claimed that being able to pay online an indirect levy on sole traders which the government was only last month going to axe is proof it is supporting people who work for themselves.

Mel Stride, financial secretary to the Treasury, made the claim in response to Tory MP Adam Afriyie, who asked in parliament what steps chancellor Philip Hammond has taken to simplify National Insurance for the self-employed.

Responding on behalf of Mr Hammond, whose department consulted with that very aim of simplification back in 2016, Mr Stride decided to speak not about NICs -- as he was asked, but about personal taxation for all individuals.

In his answer to the parliamentary question, the minister pointed out that “everyone including the self-employed” have seen their tax-free personal allowance increase to £12,500.

Mr Stride then claimed that the government has “reduced the administration burden on the self-employed” by £19million a year by ensuring Class 2 NICs can be paid online via self-assessment.

Supporters of the self-employed took to social media to demand the minister evidence the £19million figure, but they also pointed out that Class 2 NICs were originally due to no longer exist by now.

In fact, in light of “unintended consequences” to carrying out previous chancellor George Osborne’s pledge of a £143 tax cut for sole traders, the government said in November 2017 that the April 2018 abandonment of Class 2 NICs would need postponing until 2019.

This month however, the government turned that postponement into an outright cancellation, saying following through with it would harm the low-income self-employed, and introduce greater complexity into the tax system.

Freelance trade groups have condemned the U-turn, saying it shows the government has ‘turned its back on the self-employed,’ and charities agree, saying the added complications would have been outweighed by the advantages.

“The government is committed to simplifying the tax system and supporting the self-employed,” Mr Stride said in answer to the parliamentary question.

“[Ensuing Class 2 NICs can be paid online]….has modernised the way Class 2 NICs is assessed and collected, making the system simpler and more straight-forward on the self-employed.”

To a tax dispute advisory, WTT Consulting, there are ulterior motives at play. “[Mr Stride’s] party's policy is that HMRC is right because the country needs the money,” said the advisory’s Graham Webber.

He added: “Until we have a change in how politicians are allowed to conduct themselves, this sort of unintended callousness from an elected representative is our lot.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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