The chancellor hasn’t finished fiddling yet
The self employed shouldn’t relax yet, says Merryn Somerset Webb. One way or another, Philip Hammond will be back to tax them.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Twice daily
MoneyWeek
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Four times a week
Look After My Bills
Sign up to our free money-saving newsletter, filled with the latest news and expert advice to help you find the best tips and deals for managing your bills. Start saving today!
So much for Philip Hammond's Budget surprise. His small attempt to bring the tax paid by the self employed in line with that paid by the employed (its all about fairness) has lasted all of a week.
That makes this no more than a stay of execution. The self employed do pay less tax than the employed, despite now getting similar benefits and that is unlikely to be left to stand.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The cut in the dividend allowance took aim at the same group as the National Insurance (NI) rise (albeit with quite a lot of collateral damage) and the changes to the flat-rate VAT rate have done much the same (more on this in MoneyWeek in a few weeks, but all you need to know for now is that the flat rate system actually allows some of the self employed to make a profit out of paying VAT!).
So, what next? Perhaps some change to business property relief, says NFU Mutual. Perhaps more fiddles with VAT, more clampdowns on expenses claims or perhaps, suggests George Bull of RSM, a new campaign on the "elephant in the room": tax evasion.
The shadow economy (something it is clearly easier for the self employed than the employed to operate in) costs the government well over £11bn a year. Why not invest more in trying to cut it start perhaps with some more amnesties for anyone wanting to come clean?
Finally, the self employed might like to prepare for an extension via the tax system of pensions auto-enrolment (that they don't have the same pension provision as the employed, while not a responsibility of the taxpayer, is clearly a matter of concern for the welfare state). This won't look like an NI rise but it will effectively be one.
As I say, best not relax Hammond might not have found his solution yet but he's definitely identified his problem.
-
ISA fund and trust picks for every type of investor – which could work for you?Whether you’re an ISA investor seeking reliable returns, looking to add a bit more risk to your portfolio or are new to investing, MoneyWeek asked the experts for funds and investment trusts you could consider in 2026
-
The most popular fund sectors of 2025 as investor outflows continueIt was another difficult year for fund inflows but there are signs that investors are returning to the financial markets
-
Our pension system, little-changed since Roman times, needs updatingOpinion The Romans introduced pensions, and we still have a similar system now. But there is one vital difference between Roman times and now that means the system needs updating, says Merryn Somerset Webb.
-
We’re doing well on pensions – but we still need to do betterOpinion Pensions auto-enrolment has vastly increased the number of people in the UK with retirement savings. But we’re still not engaged enough, says Merryn Somerset Webb.
-
Older people may own their own home, but the young have better pensionsOpinion UK house prices mean owning a home remains a pipe dream for many young people, but they should have a comfortable retirement, says Merryn Somerset Webb.
-
How to avoid a miserable retirementOpinion The trouble with the UK’s private pension system, says Merryn Somerset Webb, is that it leaves most of us at the mercy of the markets. And the outlook for the markets is miserable.
-
Young investors could bet on NFTs over traditional investmentsOpinion The first batch of child trust funds and Junior Isas are maturing. But young investors could be tempted to bet their proceeds on digital baubles such as NFTs rather than rolling their money over into traditional investments
-
Negative interest rates and the end of free bank accountsOpinion Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK banking system slightly less awful, says Merryn Somerset Webb.
-
Pandemics, politicians and gold-plated pensionsAdvice As more and more people lose their jobs to the pandemic and the lockdowns imposed to deal with it, there’s one bunch of people who won’t have to worry about their future: politicians, with their generous defined-benefits pensions.
-
How the stamp duty holiday is pushing up house pricesOpinion Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb.
