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HMRC - removal of Class 1 NI contributions for self-employed


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I've not seen any mention of this on the site, but with the search broken, difficult to check.


It's been very annoying for me to have lost nearly 10% of some contracts because an element (or all) of my contract has performance in it. Even if my only on-stage activity is the back end of a cow when somebody is ill, then my invoice to the production company has been subject to National Insurance Class 12 contributions - even though I already pay Class 2 and 4 on my business activity.


Indeed, it was even extended to musicians and dancers, and it created split personalities - self-employed status for Tax, but employed for NI - and of course cost the producers too!


I just discovered it's changing in April, and I'll be just self-employed me again, which is good. It doesn't seem to have got any coverage that I can find - so maybe many people it impacts don't know. My old accountant thought the Class 1 payments were just 'tough' - but my new one offset the extra I'd paid in Class 1 against what I would have had to pay in Class 4 - so not as bad as previously - but it's nice to be changing back to common sense. Equity should still be happy, because unemployed actors will be able to claim jobseekers allowance still - so should be ok.

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Paul, we had a short discussion on Universal Credit a year back and a longer one on Zero Hours contracts which both have some bearing on this. The changes to NI are related to Universal Credit which, though delayed, they seem determined to push ahead with. Only this week it was announced that yet another 100 private sector consultants were being drafted in to sort out the mess.


If Equity really believe that actors will be able to claim JSA in future when JSA will not exist then they haven't read This!

Since the unemployed actor will be assumed to have an income of at least NMW X 35 hours a week, they will not qualify for UC/JSA or any other benefits as a single person. No ESA, JSA, HB, Working Tax Credit, Income Support, nothing.


The conditionality of UC also means that they can simply tell the self-employed who claim UC/JSA that their work is not "gainful self-employment" and to get more hours in any occupation. DWP can in future tell claimants to shut down their "unsustainable" self-employment and go stack shelves on the Work Programme if they want benefits. They've done it to the sick and disabled and are now working their way up the "food-chain". First they came for ............


Next in line for a pasting could be the under 25's who might be exempt from employees and employers NIC's (Hooray?) This means that those under 25's will not be eligible for any contributions based benefits, will lose out on OAP contributions and will almost certainly get sacked on their 25th birthday. (Boo!)

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That's not very well promoted info Kerry - my ignorance was prompted by the positive spin it seemed to me to have - the little barbs beneath the surface were very difficult to find on Google, unless you know they are there. Perhaps my son was very sensible in giving this up in favour of what my wife called a proper job!
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