"One of the country's leading think tanks has called for controversial tax reforms that could increase bills for millions of self-employed workers and business owners.
The Institute for Fiscal Studies' new report took aim at a tax system which “discourages employment, investment and risk-taking” and criticised the lower rates levied on capital gains, dividends and self-employment income.
An employee in a £40,000 job generates £3,300 more than a self employed worker doing the same role - and £4,300 more than someone working through their own company, the report said.
The “unfair” treatment explains the rise in self-employment to 5m while the number of owner managers has doubled to 2m in the past 20 years, according to the IFS.
Its researchers said a “particularly attractive” option was combining higher rates of self-employed national insurance contributions and capital gains with more generous allowances to encourage investment.
The report will be seen as cover for a potential tax grab from the Chancellor, Rishi Sunak, as he prepares for his next Budget on March 3.
Mr Sunak hinted at a potential raid on the self-employed early in the pandemic when he announced a bailout package and warned that it was “now much harder to justify the inconsistent contributions between people of different employment statuses”.
Call for self-employed to pay more tax
There ought to be a very simple tax law: whoever calls for tax increases gets them - on themselves, have a checkbox in SA submission that chooses ones party affiliation for tax purposes and you get taxed accordingly, now that's fair, oh and much higher taxes on anybody connected to "think tanks" - people who run them, people who donate to them (they obviously got too much money).
The Institute for Fiscal Studies' new report took aim at a tax system which “discourages employment, investment and risk-taking” and criticised the lower rates levied on capital gains, dividends and self-employment income.
An employee in a £40,000 job generates £3,300 more than a self employed worker doing the same role - and £4,300 more than someone working through their own company, the report said.
The “unfair” treatment explains the rise in self-employment to 5m while the number of owner managers has doubled to 2m in the past 20 years, according to the IFS.
Its researchers said a “particularly attractive” option was combining higher rates of self-employed national insurance contributions and capital gains with more generous allowances to encourage investment.
The report will be seen as cover for a potential tax grab from the Chancellor, Rishi Sunak, as he prepares for his next Budget on March 3.
Mr Sunak hinted at a potential raid on the self-employed early in the pandemic when he announced a bailout package and warned that it was “now much harder to justify the inconsistent contributions between people of different employment statuses”.
Call for self-employed to pay more tax
There ought to be a very simple tax law: whoever calls for tax increases gets them - on themselves, have a checkbox in SA submission that chooses ones party affiliation for tax purposes and you get taxed accordingly, now that's fair, oh and much higher taxes on anybody connected to "think tanks" - people who run them, people who donate to them (they obviously got too much money).
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