Self-employed people have warned that the government will have to raise taxes as a result of the increase in national insurance.
SELF-EMPLOYED PEOPLE IN THE UK MAY SEE A CHANGE IN THEIR NATIONAL INSURANCE CONTRIBUTIONS, with an expert warning that the government “will have to hike taxes.”
According to a survey by Pinsent Masons, the government is facing a new tax dilemma, as a record number of people have postponed their payments. Around 850,000 taxpayers are now in Time to Pay arrangements, a 38 percent increase from a year before, equal to £100 billion in unpaid tax. This comes as Chancellor Rishi Sunak considers tax measures as a way to collect revenue in the aftermath of the pandemic.
There is speculation that Mr Sunak may opt for a short-term increase in self-employed national insurance contributions, with one analyst saying that the government “will have to hike taxes.”
“Ultimately, the government will need to raise taxes at some point,” said Mark Collins, Head of Tax at Handelsbanken Wealth Management.
“The government cannot rely alone on a strong recovery to generate sufficient revenues.”
“In the short term, I anticipate specific sectors will be targeted, such as increasing capital gains tax rates and maybe equalizing the rates of national insurance contributions paid by self-employed persons with those paid by employed taxpayers,” he stated when asked where he thinks changes will happen.
While this would be a temporary remedy, Mr Collins is concerned that in the long run, income tax and company tax rates will rise.
“It is difficult not to envision income tax and corporation tax rises in the longer term,” he concluded.
“Nearly every other country will be under similar pressures, and tax hikes may be perceived as posing less of a threat to the UK economy as other competitive economies adopt similar tax-raising tactics.
“I would also expect the government to target specific industries or sectors of the economy by penalizing environmentally harmful behavior or practices.
“Additional charges on carbon-intensive industries or practices may be imposed as a vehicle to raise taxes under the pretense of the UK leading the way on sustainability.”
Tom Selby, an analyst at AJ Bell, told This website that the UK government will likely avoid raising income tax, but would try to disguise a National Insurance hike.
“It would be too toxic,” he remarked. All of.”Brinkwire Summary News” have the triple tax lock as part of their 2019 manifesto.