Professional Documents
Culture Documents
Company?
On 8 March 2017, the Spring budget was announced in the UK, and held an
undesirable surprise for the self-employed individuals across the country. A
proposal to abolish the Class 2 NIC was made, which would mean that the self-
employed people would have to pay more National Insurance. Naturally, small
traders and self-employed individuals led a huge outcry regarding the decision,
despite the claims by the Chancellor that the move was made in order to reduce
the disparities between the company employees and self-employed people by
"leveling the ground". However, one could not help but wonder if it is a move to
establish more limited companies across the country.
Class 1, which includes the normal employees. These are paid by them
and deducted by their employer.
Class 2, which includes the self-employed people. The rate to be paid is
flat and has to be paid when the annual earnings is over 5,965 pounds.
Class 4, which deals with sole traders making more than 8,060 pounds
annually.
Unfortunately, the current proposal aims to nullify that profit by increasing the
Class 4 contributions. This means, for the same annual income (8,060 pounds),
people will have to pay a 10% NI instead of 9%. This would be further increased
to 11% by 2019. Despite the claims by the Chancellor that this would only affect
individuals with high earning, the protest and criticism do not seem to abate.
The government claimed that they are doing this only to remove the disparities
between the self-employed and employed people, which currently stands at 507
pounds a year and would be reduced to 218 pounds a year. Another argument
was that out of the 4.8 million self-employed people, only 2.5 million are earning
enough to be affected by this decision. Furthermore, the government claimed
that this decision would enable the self-employed people to have the same
benefits as those employed by companies, like payments for sick leave,
maternity leave, and holiday leave.
I hope you enjoyed reading the post and will share it with your friends. Please
share your feedbacks and thoughts in the comment box below.
Whether youre starting a bakery, tech startup or a clothing line, its never been
easier to start a business:
Quick set up It only takes 3 hours on average to get your new company
name
256bit Encryption Your details are secure with us. We use the best online
protection platform