Black Country MP accuses Chancellor of burying £1.7bn stealth tax on self-employed

Pat McFadden said the "extra tax rise" over the next few years was "buried in the Red Book" and would hit self-employed workers who were already struggling to cope with other tax hikes.

It comes after The Chartered Institute of Taxation (CIT) said that reforms to tax calculations for the self-employed will result in an acceleration of tax payments by businesses affected by the change, raising £1.7bn over the next five years.

Chancellor Rishi Sunak denied there were any extra tax rises for the self-employed and said the Government had provided "almost £30 billion of support to millions of self-employed" during the pandemic.

Speaking in the Commons, Wolverhampton South East MP Mr McFadden, the Shadow City Minister, said: "As well as all the tax rises on income and business that the Chancellor has announced in the past six months, buried in the Budget red book is a plan for a stealth tax on the self-employed of £1.7 billion over the next few years.

"After the past 18 months, when many self-employed people have had no help at all and when they're already being hit with other tax rises he's announced, why are the self-employed now being hit with this extra tax rise - which the Chancellor didn't even mention in his Budget speech last week?"

Mr Sunak said in response: “There were no extra taxes for the self-employed in last week’s Budget.

"[Mr McFadden] may be referring to a timing difference that was reflected in the Budget scorecard of previously announced policies.

"But with regard to the self-employed, I think actually take a moment to reflect on the fact that this government provided almost £30bn of support to millions of self-employed throughout the crisis and I’m very glad that we did so."

The CIT said reforms to how tax years are allocated could raise an extra £1.715bn between 2024-25 and 2026-27.