The Budget - "I make this pledge..."

[threegee]

 

Yet another of Dodgy Dave's "cast iron promises" proves utterly worthless!

[moe19]

I think we will see a bit of back peddling on the NI increase 

[Alan Edgar (Eggy1948)]

Seems fair to me, situations change therefore promises are updated or changed. 

How many of the population will it affect?  

 

• by  Sam Brodbeck - The Telegraph

8 MARCH 2017 • 1:18PM

Millions of self-employed workers face a hike in their National Insurance rates, bringing them closer in line with conventional employees.

The move will cost 60p a week to the average self-employed person and save the Government £145m by 2021/22, the Chancellor Philip Hammond said.

The change will particularly hit partners in professional firms, such as accountants, surveyors and lawyers.

In another attempt to close the tax gap between different workers, the tax-free dividend allowance, often used by company directors, is to be cut from £5,000 to £2,000.

The situation now

People who work for themselves pay two types of National Insurance, a tax that funds benefits like the state pension and job seeker's allowance.

For the 2017-18 tax year they pay Class 2 NI  at £2.85 a week  on profits between £6,025 and £8,164.

If profits are above £8,164, these are subject to Class 4 NI at 9pc. Profits above £45,000 are taxed at 2pc.

This is in contrast to employed workers who pay Class 1 NI at 12pc on earnings between £8,164 and £45,000. As with the self-employed, they pay 2pc on earnings above £45,000.

What's changing?

But the Chancellor said the current system "undermines the fairness of the tax system".

To combat this, from April 2018 Class 2 NI will be abolished as planned, and Class 4 NI will rise from 9pc to 10pc. In April 2019 rates will rise again, to 11pc.

All self-employed people earning less than £16,250 will pay less in NI as a result, Mr Hammond said in today's Budget.

 

Why change the system?

The number of self-employed workers has exploded in recent years - from just 3.8 million registered self-employed in 2008 to 4.6 million in 2015.

When the new "single-tier" state pension took effect in April 2017, the old system of basic and additional pensions were abolished. Payments under the new system are more generous than the old basic state pension and as the self-employed did not have access to the additional pension, they will see increased pensions as a result.

But until the Chancellor announced the increased in the self-employed's NI rates, they had not paid for the uplift in the new system.

Mr Hammond said it was unfair that an employee earning £32,000 will pay £6,170 in NI, between themselves and their employer, while someone working for themselves will pay just £2,300.

He added differences in relation to benefits given to parents will also be addressed via a consultation.

Income tax

In line with other workers, the self-employed have a "personal allowance" which means they can earn up to £11,500 in 2017-18 without paying income tax. 

But in contrast to employees, they pay income tax on the previous tax year's profits, revenues after business expenses. They can also deduct certain costs and even losses from previous years in some cases.

A self-employed person pays both income tax and National Insurance on the 31 January based on profits from the previous year. So in January 2017 they would pay the balance due from the 2015-16 tax year.

However, HMRC will ask for payments "on account" for the following year's expected profits on both 31 January and 31 July each year.

 

The employed and self-employed use our public services in the same way — but they do not pay for them in the same way,” Hammond said.

The Chancellor said an employed person earning £32,000 would rack up National Insurance contributions, between them and their employer, of £6,170, while a  self-employed person earning the same amount would pay just £2,300.

This difference was previously designed to reflect the variation in pension and benefits entitlements, but changed last year with the introduction of the new state pension, which gave self-employed people more entitlements.

 

[threegee]

 

Quote

Pledge:

...
2..

LAW

a thing that is given as security for the fulfilment of a contract or the payment of a debt and is liable to forfeiture in the event of failure.

 

 

 

It's pretty obvious what forfeiture must mean here.  Forfeiture of the advantage which the Tory Party gained by deception - the election result!  I've no longer any confidence in Hammond!

[Alan Edgar (Eggy1948)]

1 hour ago, threegee said:

 

 

It's pretty obvious what forfeiture must mean here.  Forfeiture of the advantage which the Tory Party gained by deception - the election result!  I've no longer any confidence in Hammond!

And how many pledges do we here day after day, by all members of all parties.

Surly you've stopped believing what politicians are forced to say up front in campaigns or interviews with TV and newspaper reporters.

On your journey through life when you found out that almost every plan you made; during the many mistakes you made and experience you gained by making those mistakes, had to be changed to meet your aims did you not come to the simple conclusion - try your best and have no regrets if you get it wrong, how else would you gain experience. Don't give up something as a penalty for getting something wrong! 

One of the examples Google brings up for Forfeiture :- 

forfeiture

ˈfɔːfɪtʃə/

noun

 

1. the loss or giving up of something as a penalty for wrongdoing.

   "magistrates ordered the forfeiture of his computer"  

    

 As you relax in your declining years just pretend your Jiminy Cricket, and you won't have to sing and dance in the rain, just whistle!

I rest my case

Edited March 10, 2017 by Eggy1948

[moe19]

As predicted, its been dropped,

  http://www.bbc.co.uk/news/uk-politics-39278968

[threegee]

Quote

'We are reversing this, I don't care how bad it is for you' What Theresa May is said to have told Philip Hammond over Budget U-turn

This doesn't sound like a chancellor who should be buying any new furnishings for No 11!   Next cabinet reshuffle?

[Malcolm Robinson]

What did he say about one of his predecessors being sacked...........

[threegee]

On 16/03/2017 at 20:10, Malcolm Robinson said:

What did he say about one of his predecessors being sacked...........

He said "Oh no! Another political legacy gone west-land!".