Rising self employment erodes income tax take

an article by Sarah White for Accountancy Daily (13 November 2019) via South West Skills Newsletter

As the number of self employed workers hit 12% of the labour force, the tax base is being eroded as they earn the same gross amount as an employed person but pay less tax. The growth in contract work and the impact of the gig economy is having a major impact with taxpayers in two thirds of parliamentary constituencies paying less income tax over the last three years.

The overall income tax paid by employees and self-employed workers has declined between 0.5% in the West Midlands and by 5% in Northern Ireland since 2016.

While income from PAYE employment increased between 5.7% in Northern Ireland and 8.7% in the north west, income from self employment has seen greater variations with the biggest change in the northwest when income rose 11.4% from £11,400 to £12,700 since 2013-14, while Wales saw the least increase with only a 4.5% increase in earnings over the three-year period.

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Labels:
self-employment, PAYE, tax_revenue, HMRC,

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