Fighting tax and NI woes, and winning some battles
FREELANCE members probably no longer need to write to MPs urgently about National Insurance Contribution (NIC) rises, after the government's U-turn. But there's much around tax we still need to act on.
Chancellor Philip Hammond's Budget announced Class 4 NICs for the self-employed would rise from 9 per cent to 10 per cent in April 2018, with another rise in 2020. There followed a Tory backlash, with Hammond apparently alerted to a "manifesto breach" shortly afterwards. On 15 March Hammond told the Commons, "There will be no increase in NI rates in this Parliament."
"Class 4s" are paid by those earning over £5965 a year in self-employment. The BBC estimate that's some 3.6 million people.
The prospect of NIC hikes for the self-employed is seen off, for now. But there's a £2 billion hole left by the screeching U-turn and "this Parliament" has to end in 2020.
The tax woes of the self-employed aren't over. Louise Bolotin alerts members to errors by Her Majesty's Revenue and Customs (HMRC) over Class 2 NICs. These have in some cases been "removed" from tax calculations for the most recent tax year, which could affect your pension. Contact HMRC now. See what we know so far at www.londonfreelance.org/fl/1703ni.html
Then there's the threat of Making Tax Digital - a new "quarterly reporting" requirement for the self-employed. Rather than the couple of lines of data we were at first led to believe, it may well mean sending in four full tax returns a year from tax year 2018.
Watch this space.