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Govt should have raised NICs for self-employed, review to find

An independent review of the Government’s approach to modern employment trends is likely to conclude that Chancellor Philip Hammond should have stuck to his guns and increased national insurance contributions for the self-employed.

Hammond withdrew the tax increase for the self-employed, one of his main Budget pledges, just days after the announcement.

However, Royal Society for the Encouragement of Arts, Manufactures and Commerce chief executive Matthew Taylor, who was chosen to lead the review, has said that taxation should be a level playing field across the employed and self-employed.

Ahead of his final report in June, Taylor told MPs on the work and pensions select committee yesterday: “It is likely that two of the strategic shifts we will advocate [in the final report] is that over time we will need to move towards a more consistent way of taxing labour,” the Guardian reports.

“We need to get to a position where it doesn’t really matter how you are employed, the system treats you in a very similar kind of way.”

While Taylor said he expected self-employment to continue on an upward trend, NICs should have been raised, in the short-term at least, in order to reflect the growing rights the self-employed have gained.

“The second part is that we need to improve the support and entitlement that we provide to self-employed people…These are changes we need to accomplish over the next few years because I think that self-employment is likely to grow.”

“That’s why I was supportive of the measure proposed by the chancellor in the Budget because I felt they were a necessary short-term move to reflect that entitlements to self-employed people have grown.”

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