Spreadsheet Phil seems to have got his sums wrong on the self-employed. In this month’s budget, ‘Hollywood Hammond’ is rumoured to be planning a fresh tax raid on the self-employed that will massively backfire for the economy.
Last year, the most glamorous man in politics got his nose almost as bloodied as John McDonnell’s when he tried to raise National Insurance Contributions for the self-employed. But now he seems to be back for more, with reports he’s planning to extend the cack- handed changes to self-employed IR35 tax law from the public sector to the private sector.
The changes, pushed through in April last year, basically took power away from contractors so it wasn’t them who decided if they were self-employed or not, but their public sector hirers. Many ended up taxed like employees but without any of the rights like sick pay and holidays.
When Hammond made the changes, contractors upped sticks and left – leaving everyone from TfL to the NHS with delays, staff shortages and even big projects being scrapped. But no matter. Spreadsheet Phil is on the case with a plan to extend the chaos to all self-employed people.
Apparently, HMRC and Hammond think the government is missing out on £1.2 billion from self-employed tax dodging. But where exactly that figure comes from they haven’t deigned to say.
If Fiscal Phil thinks he’s going to raise those phantom figures by extending the changes to IR35, he’s got another thing coming. A quick tax raid on the self-employed might seem like a good idea in the short-term, but if the public sector is anything to go by, it will be a disaster in the long-term.
The self-employed are one of the most productive sectors of the economy: they put in £271 billion last year alone. So why, when the economy needs to be firing on all cylinders before Brexit, is the Chancellor gunning for them?
A short-term tax raid like this would be disastrous – for the self-employed and for the economy they contribute so much to. So, perhaps it’s time for Spreadsheet Phil to go and check his chart again?