Self-employed showed smart way to reduce bill for 'Covid tax break'
Chancellor Rishi Sunak is reportedly looking to hit self-employed people in the UK with a tax hit. This would be done by axing a National Insurance payment band to bring them in line with payments made by employed staff. According to the i, Treasury sources have indicated that Mr Sunak “is minded” to level up the National Insurance system to “create a level playing field”. Currently, self-employed people pay class four National Insurance at 9 per cent on profits of between £9,501 and £50,000, but employed staff pay 12 per cent. Both pay 2 percent on profit over £50,000.
As fears of a tax hike grow, one expert had advised the self-employed on how to secure a “Covid tax break”.
Mike Warburton – previously a tax director with accountants Grant Thornton – wrote for the Telegraph in March that independent workers could be entitled to a 60 percent tax credit.
This came after Mr Sunak made an announcement that could provide sole traders and partnerships with a cash benefit by reclaiming tax paid in the last three years.
Mr Warburton said self-employed people who have accrued losses can make claims in order to soften the blow from the pandemic.
