Chancellor Rishi Sunak was accused of £1.7bn "stealth tax" on the self-employed as his Budget was slammed by Labour in the Commons.
The Treasury has switched round the rules on how tax is calculated for unincorporated businesses and now more than half a million sole traders face an average extra bill of around £3,000.
The move, which will net Treasury coffers £1.7bn over the next five years, was buried in the small print of the Budget published last Wednesday.
It comes after the Institute for Fiscal Studies said that hikes in tax and an expected rise in inflation - which some experts predict could climb as high as 5% - will leave working families facing "real pain".
Mr Sunak was taken to task over the government's "stealth tax" on the self-employed.
Shadow Treasury minister Pat McFadden said: “As well as all the tax rises on income and business the Chancellor has announced in the past six months, buried in the Budget Red Book is a plan for a stealth tax on the self employed of £1.7bn over the next 5 years.
"After the past eighteen months when many self employed people have had no help at all and when they are already being hit with other tax rises, why are the self-employed being hit with this extra tax rise which the Chancellor didn’t even mention in his Budget last week?"
"The Chancellor’s tax bombshell budget will leave working families as much as £3,000 worse off, the Resolution Foundation has said, and the Institute for Fiscal Studies says ballooning inflation and tax increases will leave workers with 'real pain' in the months ahead."
Mr Sunak attempted to dodge the question by saying there were "no extra taxes" for the self-employed, and that the rule change was captured as part of "previously announced policies".
The Chancellor said the Government had provided “almost £30 billion of support to millions of self-employed” during the Covid-19 pandemic.
Shadow chancellor Rachel Reeves also challenged the Chancellor over much the average weekly family shop was expected to rise over the next year due to inflation, with the answer being on average £180.
The Labour shadow minister also had a dig over Mr Sunak mixing up Greater Manchester's Buy with Lancashire's Burnley while on a post-Budget visit to the North last week.
She said: “According to the Office for Budget Responsibility, the Government’s supply chain chaos, woefully inadequate post-Brexit planning and a lack of HGV drivers have contributed to higher inflation.
“The cost of the weekly shop is already going up and up, as the Chancellor would have heard from shoppers in Bury last week. So does the Chancellor have any idea of how much the average weekly supermarket shop is expected to increase in the course of the next year for a typical family?”
Mr Sunak replied the government was "aware that there is price inflation" and claimed there were "global factors" behind it.
