Chris Bryce, chief executive of the Association of Independent Professionals and the Self Employed, says Yes.
The chancellor heralded the UK’s economic strength and “record employment”, but then proceeded to hit the very people responsible for delivering this.
No matter which way you choose to work, the self-employed now face a potentially hefty tax bill. All sole traders are facing a 2 per cent hike in Class Four National Insurance contributions by 2019, hitting those hardworking, enterprising individuals looking to start and grow a business.
The situation is equally bleak for those running their own limited company – the chancellor announced a 60 per cent cut in the tax-free dividend allowance.
The government has chosen to support SMEs through business rates concessions, but only at the expense of smaller microbusinesses. This will hit the flexibility that has been vital in ensuring the UK economy outperforms our closest neighbours.
Philip Hammond should beware killing the goose that laid the golden egg – the UK’s balance sheets won’t look too rosy in the long term if entrepreneurialism is stifled.
Nick Hungerford, founder of Nutmeg, says No.
The chancellor put it well: “people should have choices about how they work, but those choices should not be driven primarily by differences in tax treatment.” People become entrepreneurs for many reasons – realising a dream, lifestyle choice – and tax is rarely among them. That’s as it should be.
The outlook is far from dark. There are many supportive measures for would-be Zuckerbergs, from the Global Entrepreneur Programme to the Seed Enterprise Investment Scheme and entrepreneur visas. The UK’s competitive corporate tax rate supports entrepreneurs, and we have a vibrant ecosystem for new businesses – from our professional services excellence to extensive access to capital and mentors.
Finally, a note on fiscal context: Philip Hammond’s measures render the tax treatment of the employed and self-employed more equal, correcting the relative generosity toward the self-employed under current arrangements. The tax burden is now more fairly shared, and entrepreneurs still have every reason to choose the UK.