Budget 2017 comment from corporate tax expert Pete Miller of The Miller Partnership, based in Leicester.
“Probably the biggest issue in the Budget is the increase in class 4 National Insurance contributions for self-employed people to 10 per cent from April 2018 and 11 per cent from April 2019.
Additionally, director shareholders are also penalised by the reduction of the tax-free dividend allowance from £5,000 to £2,000 a year from April 2018.
This means that most self-employed and owner-managed companies will be worse off.
The Government talks a lot about supporting working families but its actions belie its words, with big tax hikes for self-employed people and small business owners.
The Chancellor’s rationale was that differences in National Insurance were justified by differences in pension and benefit entitlement for employees.
But the real difference is that self-employed people and small business owners bear the commercial risks of their businesses failing; risks that simply do not apply to employees.
Business owners and the self-employed put their own money into starting businesses, employing workers and driving the economy forward, and increasing their tax burdens will reduce the attractiveness of business ownership.”