Emotional impact on self starters
08 March 2017
This proposal marks a significant shift in UK tax policy. A key feature of the tax system over the last 40 years has been to incentivise entrepreneurship, recognising the risks that come with self-employment. By helping businesses to grow and employ people, governments reap greater tax revenues in the longer term. The measure technically doesn't break the short lived pledge not to increase NI, IT, or VAT in this parliament, as class 4 NIC was never included. But many business owners will be concerned however that they are now in the Chancellor's sights for the remainder of this parliament. While the Chancellor's logic about removing anomalies in the system is hard to fault, it has an emotional effect on self-starters - the very people the Chancellor most needs to rely on. My worry is that by binding themselves with the tax lock, the Government will continue to look at the entrepreneurial sectors of the economy for the tax rises it needs.