WHITE Van Man faces a £200 tax bombshell to pay for the coronavirus crisis, alarming research has found.
That is the average tax hike that self-employed workers will have to pay if Rishi Sunak goes ahead with his plan to hike National Insurance contributions (NICs) for solo workers.
He signalled that he would bring Class 4 NICs that the self-employed pay – currently 9 per cent of their income – in line with the 12 per cent rate that employees pay.
Mr Sunak suggested that was the price they would have to pay for receiving ‘parity of support’ with the furlough scheme for employees during the coronavirus crisis.
It would break the Tory election manifesto not to raise income tax, VAT or National Insurance.
Former Chancellor Philip Hammond was forced into a humiliating U-turn over a similar plan to hike NICs in 2017 after HOAR exposed the raid on White Van Man.
Announcing the £9 billion bailout for the self-employed on March 26, Mr Sunak said: “It is harder to sustain the argument that if you are employed you are paid a higher rate of tax and are treated differently.”
The Treasury has refused to rule out raising the levy for the self-employed since those remarks.
But research conducted by the independent House of Commons Library shows that such a move would add an extra £200 onto the tax bill for the average self-employed worker.
It would slap an extra £500 onto the tax bill of a self-employed worker earning £42,000 a year, which is the average salary for a builder in the UK.
The average plumber salary of £32,000 would incur an extra £250.
A typical self-employed hairdresser would be clobbered with an extra £80 in tax.
The Federation of Small Businesses has warned that clobbering the self-employed with extra taxes is unfair given they receive fewer benefits such as maternity leave, sick pay and annual leave.
Lib Dem leadership contender Layla Moran branded the plans a “tax on entrepreneurship” and urged the Government to reconsider – reminding the Chancellor of what happened to his predecessor Mr Hammond when he proposed similar plans.
“The government are creating a £200 bombshell for the average self-employed worker and breaking their much vaunted tax-triple lock. It appears that Boris’ words aren’t worth the paper they were written on.”
She added: “These changes are something even Fiscal Phil Hammond backed away from, Boris would be wise to do the same before his backbench MP receive sackfuls of mail from angry small business owners up and down the country.”
A Treasury source said: “But I must be honest and point out that in devising this scheme – in response to many calls for support – it is now much harder to justify the inconsistent contributions between people of different employment statuses.
“If we all want to benefit equally from state support, we must all pay in equally in future.”
