OTS reforms will harm the self-employed, says Deloitte partner
The proposal to merge income tax and National Insurance would result in higher costs for self-employed people, warns tax expert
SELF-EMPLOYED PEOPLE would lose out from the proposals set out by the Office of Tax Simplification, a Big Four tax partner has claimed.
Bill Dodwell, tax partner at Deloitte, said that a merger of income tax and National Insurance would increase the amount levied on the self-employed as their NI bills are currently lower.
“There are more questions than answers,” he said. “I can’t really see that a lot of it is terribly practical. If you are increasing NI on the self-employed, you are hardly encouraging an enterprise culture for growth that the chancellor is pushing towards.”
The risks involved in setting up a business are much larger, he added, so self-employed people deserve tax breaks “simply to recognise the positive aspect they have on the economy and encourage people to take the risk”.
There was no acknowledgement of that in the report, he said, which was a “disappointment”.
The proposal for a simpler tax system for micro businesses with a turnover of less than £20,000 was welcome, but this would apply to very few people, he added.
“If it is going to make the calculations simpler but the tax paid out broadly similar, then that is a good thing. But it does not look like that to me,” he said.