In the recent Spring budget, the Chancellor Philip Hammond, controversially decided to raise National Insurance contributions paid by the self-employed by 2%. This move has been supported by the independent think tank, the Institute for Fiscal Studies (IFS), who have previously criticised the current system for being both complex and unfair, differentiating between employees and the self-employed who do the same job.
This is a response to the trend towards more workers becoming self-employed and “incorporated” by starting up their own companies, which would in turn reduce tax revenues for the government. Time will tell as to whether the Spring budget will negatively impact the amount of people going into self-employed business.
Students going for Economics, Economics and Management, Land Economy and PPE should look further into the current tax system, analysing different tax rates and the impact of the Spring 2017 budget. Students should also explore the role of think tanks (such as the IFS) in policy making and budget decisions, and what moral and economic implications this may have.