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Low earning self-employed need more support

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Changes are needed to the level of financial support for low earning self-employed workers, according to The Low Incomes Tax Reform (LITRG).

The chancellor announced a number of measures relating to self-employed workers in his Budget 2016 statement, including:

  • from 2018, class 2 national insurance contributions for the self-employed will be abolished
  • providing people with working tax credit claimants with access to business and mentoring support
  • the new enterprise allowance scheme will be extended to self-employed universal credit applicants. 

Plans have also been set for face to face trial support and providing jobcentre advisors in the Department for Work and Pensions for self-employed working tax credit applicants.

A new HMRC helpline will be introduced for new business start-ups with phone lines operating 7 days a week.

LITRG Chairman, Anthony Thomas said:

“We particularly welcome the announcement of a dedicated helpline for new businesses as we recommended this to the Office for Tax Simplification. We wait to see if the investment in HMRC call centres results in shorter waiting times for businesses trying to understand their tax position and responsibilities.

“Nevertheless, low income self-employed workers will face difficulties with the introduction of universal credit, especially as the minimum income floor will result in many being treated as earning the national living wage for a 35 hour working week, even if their business is still building up or they have hit a bad period.”

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