Millions of self-employed workers face being forced to hand over their tax earlier under a Labour shake-up that risks squeezing the cash small businesses need to survive.
From April 2029, around three million taxpayers who make Self Assessment payments on account will move to more frequent payments during the tax year. Ministers have yet to decide whether sole traders will face monthly or quarterly demands.
This is a concern for plumbers, builders, freelancers and other workers whose earnings fluctuate. A late-paying customer, an unexpected repair or a sudden drop in work can leave an otherwise viable business struggling to find the cash.
Payments will continue to be calculated using the previous year’s tax bill. Taxpayers whose circumstances change will be able to update their payments online.
Andy Burnham’s government presents the overhaul as a way to make budgeting easier and reduce unexpected bills. However, that still leaves workers having to judge how far their earnings might fall while managing the pressures that caused the reduction in the first place.
Consider a freelance designer who cuts her hours to care for an ill parent. Last year’s earnings may bear little resemblance to what she can bring in now.
Or take a plumber facing a £4,000 bill to repair the van he needs for work. If a tax instalment follows shortly afterwards, he could be pushed into borrowing to cover both.
There is also a looming problem during the changeover. HMRC acknowledges that in 2029-30, affected taxpayers will have to make their final payment for the previous tax year while starting payments under the new arrangements. It promises support, including payment plans, with further details due in 2027.
For small businesses, those details will matter enormously. An overlap in payment demands could put pressure on money already earmarked for equipment, suppliers or household bills.
Why should hard-working British people be treated as cash cows by a government that is more interested in getting its hands on their money than helping them to succeed?
Reform UK’s Economic Rescue Plan would let small businesses keep more of their hard-earned money, and allow them to spend less time dealing with the taxman.
A Reform government would raise the VAT registration threshold from £90,000 to £150,000, giving smaller businesses room to grow. On top of that, Reform will abolish IR35, scrapping the rules that tax some contractors working through their own companies as employees.
Within the first 100 days of government, Reform UK would also raise the tax-free personal allowance to £15,000, allowing more self-employed workers – alongside other eligible taxpayers – to keep more of what they earn.
From April 2029, around three million taxpayers who make Self Assessment payments on account will move to more frequent payments during the tax year. Ministers have yet to decide whether sole traders will face monthly or quarterly demands.
This is a concern for plumbers, builders, freelancers and other workers whose earnings fluctuate. A late-paying customer, an unexpected repair or a sudden drop in work can leave an otherwise viable business struggling to find the cash.
Payments will continue to be calculated using the previous year’s tax bill. Taxpayers whose circumstances change will be able to update their payments online.
Andy Burnham’s government presents the overhaul as a way to make budgeting easier and reduce unexpected bills. However, that still leaves workers having to judge how far their earnings might fall while managing the pressures that caused the reduction in the first place.
Consider a freelance designer who cuts her hours to care for an ill parent. Last year’s earnings may bear little resemblance to what she can bring in now.
Or take a plumber facing a £4,000 bill to repair the van he needs for work. If a tax instalment follows shortly afterwards, he could be pushed into borrowing to cover both.
There is also a looming problem during the changeover. HMRC acknowledges that in 2029-30, affected taxpayers will have to make their final payment for the previous tax year while starting payments under the new arrangements. It promises support, including payment plans, with further details due in 2027.
For small businesses, those details will matter enormously. An overlap in payment demands could put pressure on money already earmarked for equipment, suppliers or household bills.
Why should hard-working British people be treated as cash cows by a government that is more interested in getting its hands on their money than helping them to succeed?
Reform UK’s Economic Rescue Plan would let small businesses keep more of their hard-earned money, and allow them to spend less time dealing with the taxman.
A Reform government would raise the VAT registration threshold from £90,000 to £150,000, giving smaller businesses room to grow. On top of that, Reform will abolish IR35, scrapping the rules that tax some contractors working through their own companies as employees.
Within the first 100 days of government, Reform UK would also raise the tax-free personal allowance to £15,000, allowing more self-employed workers – alongside other eligible taxpayers – to keep more of what they earn.
