Contractor National Insurance Rise
Theresa May announced this morning that the contractor national insurance rise legislation will not take place till the Autumn now.
She is bowing to pressure from within her own ranks of Tory MPs.
The Guardian has identified 18 Conservative MPs who say they will vote against it. They have an overall majority of only 17.
National Insurance Changes
She said that legislation to handle National Insurance rises was always handled separately.
However, she didn’t say that on Budget day.
Indeed she didn’t say it until after her backbenchers revolted over the contractor national insurance rise.
Still to be Implemented
It looks, however, as if she still intends to implement it.
She is just hoping that things die down a bit an she can get it through in a few months time.
Said LibDem leader Tim Faorron, “Kicking the can down the road is not enough. They need to axe this tax, not think people won’t notice in a few months. It’s a scandal this government thinks people are so stupid”.
Hitting Conservative Core Voters for Six
The trouble for May and Hammond (it sounds like an England opening partnership at cricket) is that this hits their own core voters.
It hits both the professional classes like IT contractors and national health staff but also what is known as ‘white van man’.
They have a sense of betrayal after the manifesto commitment not to raise National Insurance.
Broken Conservative Manifesto Promise
Theresa May said that it would make the tax system “simpler, fairer and more progressive”. She said that it did not break a manifesto commitment not to raise National Insurance.
May says that what they meant was that they would not cut Type 2 National Insurance and this is Type 4.
If that was the case it would have been quite easy to say “We will not cut Type 2 National Insurance” instead of “We will not cut National Insurance”.
Guto Bebb, hte Wales Office Junior Minister said “I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election.”
Matthew Taylor Report into Rise of Self Emplolyment
This legislation will come after Matthew Taylor’s report into the rise in self-employment and the gig economy.
He is expected to recommend that employment rights and social benefits for the self-employed should be enhanced.
The Government will publish a report then putting their case for the contractor national insurance rise. This will be in tandem with aspects of the Taylor report.
Would contractors accept a national insurance rise if they are to get certain benefits that employees get?
Many of those in the professional classes would prefer to just get on with it without Government interference.
History of Broken Manifesto Promises
History is littered with those who made manifesto promises and then didn’t keep them.
You only have to look at the LibDems and their pledge not to raise tuition fees.
They were only the junior partner in the Coalition too.
Mick cCegg said that they should never have made that pledge. The problem was that they did – and should have kept to it.
It was one of those pledges that they bargained away with the Tories, the senior partners in he Coalition.
Watch my Lips – No New Taxes
You can look at Geroge Bush senior, who said before the election “Watch My Lips. I will not raise taxes” – and then did.
He became a one-term president.
His taxes rises were actually what the country needed and worked very well.
But it didn’t matter!
Devaluation of the Pound
Harold Wilson’s Labour Party said in 1966 that they would not devalue the pound – and did. He lost the 1970 election to Ted Heath.
So, in conclusion, Theresa May looks as if she is going to keep the contractor national insurance rise.
She reckons if she waits a few months we will all have calmed down by then and she can implement it then.
There may be some sugar coating of employee type benefits thrown in – which most contractors don’t want anyway.
IPSE not Defending Contractors
The worrying thing about all of his is that all Governments feel that they can attack contractors and freelancers with impunity.
They are not afraid to do so.
Where is contractors group IPSE in all of this?
It’s just as well that the Conservatives back benchers revolted over it.
So, now the government reckon if they just wait a few months everything will be fine and they can implement the contractor national insurance rise.
We shall see!
My feeling is that this is Contractors Last Stand.
This is an opportunity to put a line in the sand and say ‘no more’.
They have the backing of the Labour party, LibDems and enough Conservative backbenchers.
Let’s see what contractors and their representatives can do!
What will the future of IT Contracting look like if they don’t?
See also Contractors Limited Company Dividends Slashed by Chancellor.
See also HMRC Sets Public Sector Contractors Trap.
Ad – Simply Umbrella – Simply the Best
New umbrella product Simply Umbrella came into being after the Chancellor’s spring statement.
It’s just like other umbrella companies in that the contractor is an employee of Simply Umbrella but they get to keep far more of their money than through an ordinary umbrella company.
It could be a great solution for both public sector contractors IR35 problems and indeed any contractor.
To find out more just click on Simply Umbrella.
