Budget 2016 leaves most freelancers better off, marginally
Self-employed freelancers are technically ‘winners’ of Budget 2016, but not to a significant enough degree that they are likely to feel it, a tax firm’s analysis indicates.
Compiled for The Independent, the analysis shows that although no self-employed person who is single will be worse off under the Budget, the most they will be better off is just £30.
“Those earning £45,000 or more are getting the biggest income boost,” say notes accompanying the analysis, referring to the £30 increase, calculated by Blick Rothenberg.
The notes, which say the estimates take all Budgetary announcements into account, add: “[Meanwhile] the poorest [self-employed], as usual, are getting nothing but a metaphorical slap in the face”.
In line with this commentary, freelancers on £10,000 will see no monthly gain this tax year or next. They also didn’t receive an extra penny at Autumn Statement 2015, or at Budget 2015.
Their extremely well-off counterparts – those self-employed people taking home between £125,000 and £150,000, are being given more of a handout.
They will only be making no more than they currently do next year, so will only be hit in 2016/17, before getting a boost in 2017/18 of £13 every month.
Although small, the rise is still greater than mid-tier freelancers can expect, as a paltry uptick of just £8 a month awaits self-employed salaries of between £15,000 and £40,000. Even then, the uptick is more than 12 months away.
The downbeat projected income figures are likely to temper optimism from the freelancer community about the Budget backing the self-employed, such as by confirming the abolishment of Class 2 NICs.
While the resulting £134 increase and red tape reduction will still go down well with one-person businesses, official figures put the cost of the abolishment at £360million a year by 2019/20.
The two tax breaks announced at the Budget for the sharing economy (one for eBay-style traders, and one for Airbnb-style room renters) have been estimated too, at a cost of £235m a year by 2018.
20th March 2016