'˜Nothing' for self- employed in Budget
A Sheffield entrepreneur who recently set up her own business says the Government 'did nothing to help us out' in the Budget.
Jo Dawson, aged 34, is a self-employed solicitor and mum to four-year-old twins who lives with her partner and works from home.
The Budget did little to encourage her, she said, but did hand her extra taxes.
She said: “So far as I can see, the Budget hasn’t done anything to help me in the early and critical months of my new business.
“For every £100 my company makes, I have to pay £20 corporation tax. Reducing this to £19 isn’t going to make much difference.
“I also have to pay income tax on my salary and dividend. I pay myself a fair salary, not the nominal £500 a month that others try and get away with and so I pay income tax and national insurance too.
“The decrease in the dividend allowance from £5,000 to £2,000 was aimed at wealthy investors with large share portfolios, but for the man or woman on the street with their own limited company like me, it’s an extra £600 of tax a year I have to pay.
“It may reach a point where it would work out better to pay myself more of a salary and take reduced dividends, because then at least I would have a lower corporation tax liability.
“I understand that the chancellor wants to close what he calls the unfair gap between the self-employed and the employed.
“But what he doesn’t take into account is the risks that the self-employed take – voluntary risks I accept, but we are the ones wondering whether we will make enough money each month to pay a mortgage.
“The people who do exploit the system, the sole traders with cash business who don’t declare everything they make, are largely untouched by this. Yes, they will see their NI rate increased but on the basis that they are only declaring the bare minimum anyway, this isn’t going to keep them awake at night.
“I would have liked to have seen more tax breaks for those operating micro businesses, or for those in their first years of establishment, to enable us to get onto an even keel.”