Stepping away from professional life for a minute: my favourite online piano tutor has an offer running, which I’d jump at if I wasn’t already a subscriber. And the new UK self-employment support scheme? New barristers may get nothing. And pay loads…
Two quick things. One I hope is useful. The other is – I admit – basically a complaint.
The good stuff first. I mentioned Jazzedge, the jazz (and other stuff) piano tuition site I subscribe to. Willie Myette, who runs it, has now discounted a cut-down subscription to a subset of the site. He’s charging about $120 a year (paid in one go) for it. The discount lasts till (I think) 6pm on Wednesday 1st April.
I’ve checked, and it includes about 80% of everything I’ve looked at yet, and an order of magnitude more of stuff I haven’t got to. If you’re really good already, this probably isn’t for you. But if like me you mess about, try your best but really need help to get better, go for it if you can spare the cash. (And I recognise for us all right now, that’s a real and agonising question. But there’s a 14-day trial during which as I understand it you can cancel and get your money back.)
Now the whinge. As with the whole self-employed bar, I’d been awaiting news of the Government’s self-employment income support scheme. For anyone working pretty close to full time, who was doing so before the current tax year, and made less than £50k in taxable profits then averaged across up to the previous three years, it’s… not bad. Not perfect, but what is? The big issue for these people will be waiting possibly till June to be paid. And that, admittedly, is a HUGE issue.
(The unspoken question is: why do it this way? Complex, exclusionary, difficult. And to my mind no more appreciably fraud-proof than simpler alternatives. See below.)
But that leaves out more people than you’d imagine. For instance:
- Like with the child tax credit clawback, if your profit was £51k and your spouse doesn’t work, or was employed but has been made redundant, or any number of other scenarios, you’re screwed. Not a penny. But if you each made a £49k profit, you’re golden. £5k for your family a month. That’s just wrong.
- If you work through a company – often (for broadcasters) because the BBC and other commissioning bodies won’t work with you otherwise – and you don’t pay yourself a salary (and even if you are, aren’t prepared to down tools and do nothing at all. Not business development, nothing. Which is suicide for a small business), then you’re out too.
- Anyone who’s been diligently building up a side hustle for years but went into full-time entrepreneurialism in the past 18 months or so. Because if your 2018-19 tax return was less than 50% self-employed income, nothing for you.
- That last one will hit a lot of new barristers, those who were pupils last year. (Myself included.) Most of us have only a month or two of self-employed taxable profits for 2018-19 – but if we had employment earnings for April-September 2018 which exceed that already small amount, that’s us out too.
Yeah, I know. I’m whingeing. But there’s the sting in the tail: the threat from Rishi Sunak to up our National Insurance rates. We self-employed people currently pay £3 a week in Class 2 contributions, and 9% in Class 4 on all taxable profits between £8,632 and £50k. Above that, Class 4 is 2%.
For employees, it’s 12% (the floor and ceiling are not quite identical, but within a couple of dozen quid, so let’s keep it simple).
Here’s the sting. Their employers pay 13.5%. And there’s no ceiling.
So what’s Rishi saying?
- That we get to pay an extra 3% on Class 4 – effectively a basic-rate rise of 3 pence in the pound? (If so, you can start giving us statutory sick pay when we have to cancel hearings owing to throwing up or otherwise being incapacitated.) And other support mechanisms when we have a dip in our workflow. I’m not just talking about barristers here – Class 4 is lower for self-employed people because we get less. Pay more, entitled to more. Fair’s fair.
- Or that we’re effectively going to get a rise in tax across the board of 13.5 percentage points? I actually can’t believe this can be what he means. Please, someone, tell me it isn’t.
Anyway, we don’t know. (Well, I don’t. Far smarter employment barristers like my friend and colleague Daniel Barnett will know better than I do…)
And all of this ignores the big point: that there may have been a simpler alternative. I’m not an economist, and am happy (oops) to be shouted down by those who know more than me. But except on ideological grounds – the determination to rule out the idea as socialism-by-the-backdoor – why not provide a temporary universal basic income, and then claw it back on the basis of future tax returns on a means-tested basis? Far easier to implement, doesn’t have built-in injustices which always come with hard ceilings and past tax records, and still allows you to get a chunk of the cash back later.
I’m aware of the fraud risks. Honest – I’ve been a counter-fraud specialist for most of the past two decades. I know this will, at least in basic terms, have been risk assessed. And any system like this, introduced in these circumstances, is going to be prone to fraud. But I’m not at all convinced that what I’ve described is any less risky in these terms than the one they’ve gone with.
Seriously. Tell me. Why would this be a bad idea right now?