Bowdon entrepreneur Lawrence Jones MBE has said the tax increase for self-employed people announced in today’s Budget is “grossly unfair”.
Chancellor Philip Hammond announced an increase in National Insurance Contributions for the self-employed from 10% to 12%, saying the lower rate paid by the self-employed compared with employed people was “no longer justified”.
He said the new rate – which will raise a net £145million a year by 2021/22 – would help to “support our public services in this Budget and to improve the fairness of the tax system”.
But Lawrence Jones, the millionaire founder of Manchester-based hosting company UKFast, said the move was hitting the very people who “drive the economy”.
He said: “The move to reduce taxes for the self-employed is unquestionably a decision which reduces the incentive for risk takers. It’s these small entrepreneurs that drive the economy and often become the ones who build the SMEs and fast-growing startups we all want to see thriving.
“It’s grossly unfair to claim they’re levelling out the tax to balance with employees when employees get so many extra rights like sick pay, holiday, pensions and maternity pay. How much is that worth? I’d be thinking ‘why take the risk?’”
UKFast now has a headcount of 350 and is on track for a turnover of £42m this year after posting £34.3m in 2015.