The Conservatives are courting freelancers and umbrella company contractors by breaking news that a future Conservative government may overhaul the tax system.
Self-employed Brits currently have to navigate a minefield when it comes to taxation in the UK, thanks to the unique role they play in the economy. Unfortunately the tax system as it exists – and has existed for decades – is superbly ill-suited to contract workers, and the Tories say that if a future Conservative government could do away with much of the burden that freelancers face in their tax burdens.
The big idea so far is to combine income tax and National Insurance payments merged together in one tax. Some industry experts say that doing so will make the amount of money all taxpayers owe the Treasury from their earnings much clearer, and that’s something that freelancers need most desperately at the moment. Most pundits agree that doing so would be a serious boon for the self-employed in that it will make compliance considerably easier, but warnings have surfaced that without crystal-clear guidance on any new changes there’s a serious danger of people ending up worse off in the long run.
For what it’s worth, the increased transparency that would accompany such a change would make millions of British contractors breathe easier. Right now, many freelancers feel that meeting their tax obligations properly is only a bit more dangerous and confusing than it would be for a deaf person to try to to land a plane at night in the rain with their eyes closed and their hands tied together. No, I’m not necessarily taking the piss here either – it sounds hyperbolic but if you’ve ever tried to suss out whether you’ve paid enough tax as a self-employed contractor you’ll know exactly what I’m talking about.
If you ask me, almost any change would be for the better as long as the veil would simply be lifted from the currently Byzantine regulatory system when it comes to taxes in the UK. Don’t tell the Treasury, but I would even be in favour of a minuscule tax increase as long as it just meant that I would have an ironclad guarantee that I wasn’t about to run afoul of some barely-understandable rule written in language archaic enough to belong on the stage of the Globe theatre.