Tag Archives: national insurance

Make cheating employers pay, not lone entrepreneurs

 

Many politicians protesting, quite rightly, about the unfair hike in National Insurance contributions for the self-employed have missed the real solution.

The important contribution is the one paid by employers, at 13.8 per cent of wages for abroad middle range of employees. It is an expensive outlay on workers, and often claimed to be a deterrent to increasing the payroll.

More unscrupulous companies, mostly but not all US-owned multinationals, are evading this tax. They do not employ most of their workforce, but engage people labelled as self-employed.

As one who has been self-employed for many years, even while holding such executive positions as business editor on national newspapers, I recall that becoming self-employed was beset with hurdles. A principal test was to prove that you decided how the task was to be performed, not those paying you.

Posted in Op-eds | 17 Comments

The graph which shows why the Lib Dem policy of raising the personal allowance is the wrong priority

Here’s a graph which should make Lib Dems who continue to advocate increasing the personal allowance as an effective way to help low- and middle-income earners sit up and pay attention.

It’s from the Resolution Foundation’s report, Missing the target: tax cuts and low to middle income Britain, published yesterday.

What it shows is which households gain from the party’s policy to increase the threshold at which income tax is payable to £12,500 over the course of the next parliament. As you can see, those households which benefit most are at the wealthier end of the spectrum; the poorest 20% benefit least.

res fdn tax cuts lib dem graph 1

Posted in Op-eds | Also tagged , , and | 46 Comments

Opinion: If an NHS Tax is a step too far, let taxpayers make an optional “NHS Donation”

nhs sign lrgLiberal Democrats have committed to protecting the NHS Budget in the next Parliament. But over the next 6 years, we will need to fill a £30 billion deficit to maintain the level of quality we expect from our NHS. Social care faces a £7 billion shortfall.

There have been recent reports that senior party figures are looking at a hypothecated “NHS Tax”.

Posted in Op-eds | Also tagged | 23 Comments

Lib Dems pledge more tax cuts: after personal allowance raised to £12.5k will also increase National Insurance threshold

Danny Alexander by Paul WalterToday’s big announcement from the Lib Dems has been the “plan to cut your tax bill further”. Here’s how The Guardian reports it:

The Liberal Democrats are to burnish their credentials as the tax-cutting party for the low paid by floating the possibility of cutting national insurance contributions for anyone earning below £12,500 a year.

In a challenge to David Cameron, who is facing pressure from Tory MPs to pledge bold tax cuts as the economy grows, the Lib Dems will promise in their general election manifesto to raise the level at which workers start to pay national insurance contributions.

Posted in News | Also tagged , , and | 36 Comments

Opinion: Lib Dems should get behind renaming of National Insurance

Tory MP Ben Gummer is today introducing a 10-minute rule bill “to make provision for National Insurance to be known as Earnings Tax”. It’s a very simple renaming proposal. But branding is important, not least in politics. The Chancellor is “said to be attracted to the idea”, so if Danny Alexander and Nick Clegg were to support it, the change could make it into the Budget.

It’s well known that National Insurance is an extra income tax in all but name. As far back as 1994, Lib Dem policy was “to abolish national insurance contributions and create an integrated tax …

Posted in Op-eds | Also tagged and | 31 Comments

Opinion: Making allowances – 12 conclusions about the Personal Allowance policy

CentreForum today published ‘Making allowances’ – a paper all about the Lib Dems’ flagship policy of raising the income tax Personal Allowance. Here are some of my conclusions – some obvious, some more obscure – to help inform future tax cuts.

1) The costs are huge. The coalition’s Personal Allowance increases have cost £11bn, and the Lib Dems’ minimum wage tax target would cost at least the same again. With this combined total, we could (roughly) reduce VAT to 15%; scrap council tax or business rates; easily deliver quality universal childcare; or

Posted in Op-eds | Also tagged , and | 16 Comments

Opinion: Help me deliver a workers’ bonus

Nick Clegg has this week called for a further increase in the basic tax threshold of £500, which would cost around £1bn and put an extra £10 a week into peoples pockets. It is a good call but it’s not the best call.

National Insurance is in theory is a tax that is hypothecated to pay for our pensions, our unemployment benefits and other aspects of social security, but in reality all of our social benefits are subsidised out of general taxation. What it does however do economically is constrain the poorest paid in our society in …

Posted in Op-eds | Also tagged | 19 Comments
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Recent Comments

  • User AvatarGlenn 25th Mar - 1:20am
    Roland; I misunderstood you chap. I don't agree. Germany, France and even Italy all had and have stronger trade unions. Unions have not been that...
  • User AvatarCllr Mark Wright 25th Mar - 12:25am
    "The second problem is that the Bank of England itself takes the view that Quantitative Easing is regressive, because it pushes asset prices upwards, and...
  • User AvatarKatharine Pindar 25th Mar - 12:24am
    Dear Rebecca, As I was a Politics student and Union of Liberal Students member at Leeds University in 1966 I read your article with delight,...
  • User AvatarLorenzo Cherin 24th Mar - 11:23pm
    The article is overblown, the responses almost measured in comparison. The policy is a compromise. Yes those to the left of Ho Chi Min and...
  • User AvatarRoland 24th Mar - 10:23pm
    @Glenn - The trouble is that 'business' also includes the workers. Remember just how many of trade union call to arms has been about the...
  • User AvatarDavid Raw 24th Mar - 10:23pm
    @ Richard Underhill Yes, indeed. In fact why have a party at all ? It only causes vexation .