Thursday, 17 July 2014

UK Self employment - nothing to be pleased about?

To continue yesterday's theme, here is a view expressed of the Left in the Guardian of late.

I can quite see from the links there that there must be some correlation to people seeking to keep benefits and not wanting or being able to do jobs to become 'self-employed' as a way of keeping most of the benefits. This would account for a big jump in the self-employed whilst a the same time the benefits bill is not dropping. To this extent perhaps employment is not so healthy.

On the other hand there are many figures suggesting that income from self-employment has dropped. This may be linked to the above if you look at averages, but also it corresponds to key tax issues - such as the few business that turn over more than £80k which would mean they paid VAT.
As an example of this there was the hairdresser named and shamed in 2013 by HMRC for not declaring income.

Either way, it is an interesting thought for me. I am all for self-employment as part of self-empowerment. But with the way the tax and benefit system has been structured, it either seems to be a route to access benefits or a route to dodge taxes; neither of which is a very good result for the Country as a whole.


hovis said...

Steady on CU - "dodge taxes" starts to imply as long as a tax exists then you are morally obliged t pay it. Since when did paying tax become a moral obligation?

Our problems stem from taxes too high, lack of transparency and lack or accountability in how they are spent. All in all a very bad tax system, to compliment our broken politcal system.

Blue Eyes said...

Worth a look

Sebastian Weetabix said...

Hovis is bang on the money. The tax take is too high, the cost of living is up, and wages are stagnant. Why the fuck would you declare income in that scenario?

Timbo614 said...

I was self employed for many years.
I didn't benefit much from self employment tax wise, all my payments were into bank accounts, no cash to speak of. After years of eschewing Limited company status as tax avoidance, I have now formed one. It's seems better to me so far...

As mentioned yesterday, there is "self employment", self employment and "self unemployment"

I think a lot of the current "self employed" are drop shipping on Ebay and Amazon as mentioned. Nothing wrong with that, I did it myself for a while, provided you are not kidding yourself by using benefits to generate the actual "profit". I have no idea on the benefits side as I have never claimed any.

I always agreed that it was your moral duty
to avoid (not evade by dishonesty) paying tax as much as possible using the rules to your advantage if possible. Why wouldn't you?

Steven_L said...

Doesn't it suit big corporate interests if the potential competition is hiding under the VAT man's radar?

CityUnslicker said...

Agree with all the comments - never meant it to sound as if the cause was not taxes being too high.

The issue was more that there is a double problem here cuased by the tax and benefits system, so skewed has it become.

and YES Stephen L, the tax code is written by my ex bosses for their clients who are big business - so the whole system is totally skewed. I know tax accounts who were v pleased with themselves when the laws they had written for their clients appeared in the finance act!

James Higham said...

But with the way the tax and benefit system has been structured

And there's the rub, CUS. It really needs overhauling to provide incentive - but you've probably said this a doesn't times, or Nick has.