Freelancers on £10,000 lose under Budget 2015
Freelancers on annual salary of £10,000 are the only self-employed people except for top earners who are worse off under Summer Budget 2015, a tax firm’s analysis suggests.
Compiled for the Independent’s i newspaper, the analysis by accountants Blick Rothenberg indicates that all other self-employed earners are better off, albeit by no more than £16 a month.
This small uptick will apply in the tax years 2015-16 and 2016-17, and is reserved for self-employed people whose gross income is between £45,000 and £100,000, shows the analysis.
It adds that even smaller increases in their monthly net income - just £11 in 2015-16 and only £9 in 2016-17 - will go to freelance sole traders commanding between £15,000 and £40,000.
Although they may not feel like it, such freelancers are still ‘winners’ of the July Budget, especially when compared with their less well-off counterparts on a salary of £10,000.
For these freelancers, while the chancellor’s pinch in 2015-16 will be hardly felt (a loss of about £3), they will be more than £100 worse off in 2016-17, the accountant found.
The squeeze on such ‘£10k freelancers’ is even greater when considering their net income post-Budget for 2014-15. Then, it is calculated at £10,945 – in 2016-17, it will drop to £9,713.
So despite most self-employed traders being unscathed by George Osborne’s seventh Budget, the accountant's analysis suggests that freelancers on £10,000 will be up to £1,232 worse off.
Freelancers on an annual salary of £125,000 or more will have less to play with too – but they won’t notice, as they will be down a miniscule £4 a month - and only in the 2015-16 tax year.
Blick Rothenberg said all its calculations assumed the person works more than 30 or more hours a week; has no investment income, no pension contributions and no gift aid payments.
Potentially aware that a dent in the finances of all freelancers could be incoming, it also said it used estimates to work out NIC rates for 2016-17, pending the outcome of the Class 2 and Class 4 consultations.
15th July 2015