In this picture Philip Hammond is laughing and looking like he is throwing cash but in my prospective view actually he has collected or grabbed hard earned money of Self-employed people today when he has announced in spring Budget-2017 that the main rate of National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019.
Govt already had cut the flat rate VAT scheme for service industry, which will lead to closure of small businesses who are running on very low margins and have a low turnover in the beginning. It has shattered the dreams of millions to work as self-employed person. Now if someone wants to take a chance to become self-employed that person will think 100 times to take that step as the cost involved in becoming self-employed is increasing.
We would suggest in that case opening Limited company is better option rather than becoming self-employed. For contractors we provide £60 per month accounting.
Contact Oxon Accountancy for further details on 01235 250011.
Philip Hammond has delivered his first Budget as chancellor. These are the main key points for Self-employed/ sole trader business.
- The main rate of National Insurance contributions for the self-employed to increase from 9% to 10% in April 2018 and 11% in April 2019
- The Class 4 rate is levied on profits of more than £8,060 a year.
- The increases, which will apply to earnings below £43,000, will raise £145m a year by 2021-22 at an average cost of 60p a week to those affected. All Class 4 earnings above £43,000 will be taxed at 2%.
- Class 2 National Insurance, a separate flat rate contribution paid by self-employed workers making a profit of more than £5,965 a year, is to be scrapped as planned in April 2018.
- No changes to National Insurance paid by the employed and employers or to income tax or VAT.
- Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020.
Contact OXON Accountancy for further information on 01235 250011.