So, National Insurance Contributions for self-employed people are going up by 1% in 2018, and another 1% the following year.
I don’t particularly object to this on the grounds of a breach of manifesto commitments—this is a different administration to that elected and clearly has a different agenda. That’s the nature of our constitution, whereby we do not directly elect the chief executive (let alone—God forbid!—the head of state), and a whole different discussion.
I certainly don’t object to this because I will be hit by it. As a relatively high-earning socialist, I believe that I do not pay enough tax at present so cannot object to more, and as a democrat I must accept the obligation to pay my tax whether or not I approve of how those taxes are spent.
But it rankles greatly coming from the party that poses as the champion of enterprise. There is already a hidden burden on individuals starting work for themselves: people declared as self-employed to HMRC must pay their (projected) tax six months in advance, which means that, basically, a year after setting up you will be hit by an 18-month tax bill. This is hardly an incentive, but has been the case for a long time. To add the additional burden of substantially increased NIC contributions is a positive discouragement to anyone wishing to start working for themselves.
Corporation tax, meanwhile, will fall 1% in April, and another 2% by 2020.
This government is no friend of entrepreneurs, it is no enabler of the old-fashioned “get on your bike, pull yourself up by your bootlaces” narrative of the Conservative Party of years gone by. It is a shameless sycophant to big business, whilst casting ordinary people simply trying to improve their circumstances—the constituency and ideology that, in the past, has been the most appealing aspect of the party—to the wind.
In the context of Brexit, this is especially disturbing. With the Labour Party’s craven capitulation on Article 50, we are headed full pelt for a hard Brexit, and it appears that the government seem intent upon their plan of handling the resultant economic disaster by sucking up to big business and the financial sector, whilst doing nothing for the ordinary folk who were conned into voting for it and whose livelihoods will be endangered as a consequence. As what pitifully small taxable profit those businesses actually declare after having shunted the vast majority of their income through tax-avoidance schemes will be taxed at the ludicrously low rate of 17%, it is precisely those ordinary folk who have lost their jobs through the collapse of trade and who attempt to set up on their own who will be taxed up to the eyeballs in order to offset the negligible contribution paid by the Tories’ friends—and funders—in Big Finance.
In 2015 the Labour Party calculated that 27 of the 59 wealthiest hedge fund managers (according to the Sunday Times Rich List) had contributed more than £19 million to the Conservative Party. Similarly, the Financial Times calculated that 35% of all the Tories’ funding came from just eight individuals—all from a City background.
A few hyper-wealthy individuals—doubtless those who also bankrolled the dishonest and xenophobic campaign that achieved Brexit in the first place—have purchased the policy of the country, and paid out a pathetic few million—peanuts for them—to ensure that the United Kingdom (if it lasts) becomes one big offshore tax haven, with its workers and smaller, independent businesses being taxed into penury to pay for the corporations’ insatiable greed.
- For comparison: by that point the NIC contributions alone for self-employed people will be 11%.