The new government has only been in office a matter of months and already it has delivered a blow to small businesses and entrepreneurs.
During the election all parties but the Conservatives in particular praised the freelancer and consultancy community for providing flexible skills for growing businesses. Allowing best practice and top class advice to be provided as businesses needed it. All round it was a boost to the economy.
And the first concrete act of this Parliament has been the Summer Budget and what has happened?
A raft of taxes on those very entrepreneurs and family businesses that they were praising a few brief weeks ago!
Specifically, the Summer Budget 2015 has:
- introduced a dividend tax that adds a 7.5% tax to all dividends (after the first £5,000);
- stopped the employer’s allowance on single person companies;
- threatened to remove the 24 month travel and subsistence expense deduction (but only for small businesses).
The Chancellor has stated that this levels the tax between the self-employed and single company limited companies. If this was his intention he should have reduced the rate of tax on the self-employed; statistics show that the self-employed have a lower average earnings than the employed.
Finally, the Chancellor has been trumpeting the success of the economic recovery and rejoicing in the low rate of unemployment. Well let me spell it out…
The reason the unemployment rate is low is because many redundant ex-employees have set up their own businesses. And their reward – a slap in the face from a Conservative government.
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