Self Employed Hit by Budget

A self employed person earning £50,000 a year will be over £800 worse off because of changes to tax and National Insurance.

Treasury Minsiter Dr Alex Allinson has outlined the island’s tax and spending plans this morning.

Dr Allinson announced that the higher rate of income tax is to be raised from 20% to 22%, with the additional income ‘being ring-fenced for the island’s healthcare services’.

He has also announced changes to NI, including primary and secondary thresholds for Class 1 NI contributions and the lower profit limit for Class 4 NI contributions will be increased by 10% to £160 per week.

The upper earnings limit for Class 1 NI contributions and the upper profits limit for Class 4 NI contributions will be increased by 8.5% to £938 per week. Class 2 and Class 3 NI contribution rates will be increased by 8.5% to £6.20 and £18.95 respectively.

These change mean that a self-employed person with £50,000 a year in annual profits will be £812.96 worse off, while those earning £75,000 will be £1,312.96 worse off.