The verbal contortions exercised by our politicians make a corkscrew appear straight. The self-employed are facing a tax increase from April 2018 despite previous promises made to gain electoral favours. But significantly, the government is lying through its teeth about it.
We do not necessarily object to an increase in Class 4 NIC of 2% over the next two years and many readers will feel the same.
Firstly we accept that employees pay NIC contributions of 12% whilst the self-employed currently only pay 9%. Secondly, whilst the self-employed do not enjoy the benefits of Statutory Maternity Pay or unemployment benefits, we also accept that the state pensions received by employees and the self-employed have been equalised. There is, therefore, a valid argument that the amounts paid should be brought closer. Thirdly, whilst the equality of benefits has been achieved primarily by reducing employees’ pensions down to the level received by the self-employed, only the most optimistic (or deluded) taxpayer would expect the deductions to do follow the same route.
We do, however object to the contempt shown to the taxpayers by the Chancellor. Our message to him is that we can all recognise blatant lies when we hear them.
Lie one. This increase does not break the manifesto promise made by the Conservatives that they would not increase Income Tax, National Insurance or VAT during the course of this Parliament. Their justification is that the small print in the subsequent Act of Parliament, which for reasons known only to themselves at the time they felt was needed to make themselves keep their promise, narrowed these promises somewhat. Now we know that the purpose of that Act was to give them a ‘get out’ clause.
Lie Two. This increase in the rates of NIC will lead to a reduction in the NIC paid by self- employed taxpayers earning £16K or less. Well we don’t think Einstein could make that work. OK, last year the Chancellor reduced Class 2 NIC payable from 2018. Very good, but the praise and accolade earned by that reduction has already been heaped upon the government. It also created the new, reduced, level from which future movements should be measured. Mr Chancellor the simple fact is than an increase in NIC is an increase in NIC! Respect can both be described in many ways and also must be earned. Any respect earned by the Chancellor this week equates to the respect that is shown by an OAP on a dark night in a back street towards a gang of muggers!
To all politicians, if an increase in taxation is required then tell the truth and admit it! You might then begin to get back some proper respect!
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