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Daily Mirror
Daily Mirror
Politics
Mikey Smith

Coronavirus: Chancellor warns self-employed they face tax hike after crisis

Chancellor Rishi Sunak warned self-employed people they face a tax hike after the coronavirus crisis is over.

The financial chief made the threat while announcing details of a rescue package for people unable to work because of Covid-19.

The Government is offering the self-employed a taxable grant worth 80 per cent of their average monthly profits.

The bailout is broadly the same as that offered to employed workers - which Mr Sunak noted made it harder to justify self-employed people paying less in National Insurance Contributions (NICs).

Self-employed people with profits up to £50,000 a year - who would qualify for the bailout - pay National Insurance at a rate of 9% of profits.

Most employees earning up to £50,000 a year pay 12%.

Mr Sunak said: "As we've developed the scheme I'm grateful for the conversations I've had with the Federation of Small Businesses, the Association of Independent Professionals and the Self-Employed and a range of trade unions including the Trades Union Congress."

(PA)

He added: "But I must be honest and point out that in devising this scheme in response to many calls for support, it is now much harder to justify the inconsistent contributions between people of different employment statuses.

"If we all want to benefit equally from state support, we must all pay in equally in future."

Tory chancellors have been planning to overhaul NICs for self-employed people for years.

Former Chancellor Philip Hammond wanted to increase National Insurance contributions for millions of self employed people to bring them closer to the level paid by other workers.

But he was forced to climb down on the plans in the face of a backlash from van drivers after they were announced in 2017.

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