Chancellor Philip Hammond’s decision to stage a tax raid on the self-employed and small businesses in the Budget has met with a backlash. Here, small business champion Emma Jones MBE, of Enterprise Nation, writes an open letter to the Chancellor.
This week’s budget bombshell was a not only a belly blow for hard-working entrepreneurs and the self-employed, it was also at odds with the sentiment that the Government supports entrepreneurs and innovators.
Because while adding extra tax burdens for people who work for themselves and the founders of small firms, it has cut corporation tax for large companies.
Seeing red: The self-employed have been left incensed after Philip Hammond’s Budget added extra tax burdens for their businesses but cut corporation tax for large companies
It’s clear the Government feels that entrepreneurs have got away with paying too little for too long, resulting in a budget that appears anti-enterprise and yet again points an accusatory finger that suggests entrepreneurship is more about tax avoidance than starting a meaningful business in order to provide for themselves and their families.
This is just not true. We never see people who are simply out to avoid tax.
Our members come to us with their great ideas and we help them to shape those into sustainable businesses. Often they are holding down a day job to fund their enterprise – otherwise they couldn’t actually do it.
These outstanding individuals understand that the only way to build a business is through hard work, commitment and a relentless focus on costs – and by ploughing every penny back into the business.
When they do eventually make money now, they will see less of it. And they’ll still never have a paid holiday again.
According to the Government’s own figures, there are 5.3million micro businesses employing zero to nine people. That’s a lot of money into HMRC’s coffers.
There are more than four million self-employed. The self-employed pressure group IPSE reckons knowledge-based consultants added more than £119billion to the economy last year alone. This is not the work of tax evaders.
The Government wants to make Britain the best place to start and grow a business. Well I’m afraid the Budget delivered exactly the opposite message.
Emma Jones MBE is the founder of small business group Enterprise Nation
National Insurance contributions for the self-employed went up by two per cent and the Chancellor cut the tax free dividend rate for entrepreneurs from £5,000 to £2,000.
Both of these moves are apparently aimed at creating a fairer balance between employees and those who are self-employed. It didn’t!
The reason this is important and not simply sour grapes is this: taking your destiny into your own hands is a big scary thing. Becoming self-reliant for your finances takes a lot of guts not to mention energy, an ability to exploit opportunity, an ability to sell – and nous.
The risk-reward ratio has not been understood – entrepreneurs expect pay-back for their investment.
While I’m confident most will carry on regardless and sail through this, for some this will be the tip of the iceberg that leads them to abandon their calling.
That would be a massive shame – and a loss I think HMRC will notice.
Emma Jones, MBE, founder of small business support group Enterprise Nation.
Small Business Essentials