In Starmer's Britain hard work is now a mug's game
A relaxation of red tape, perhaps? Or some easier rules on claiming expenses, or extra time to file their tax and VAT returns. There are lots of ways the Government, could help the self-employed and by extension the millions of people who rely on the services they provide, if it chose to.
But no. Instead, it is pressing forward with a vastly complex scheme to make them file quarterly instead of annual tax returns, even though this will generate no extra revenue and involve a huge increase in complexity. It is now official: in Labour's Britain, working hard is a mug's game, and it is hardly surprising that so many people who work for themselves are quitting.
In China, when they execute you, they make you pay for the bullet. In the UK, we have not quite gone that far with the self-employed, but perhaps it is only a matter of time. According to the latest analysis, the drive towards 'making tax digital' will cost landlords and freelancers an average of £480 a year.
Under the scheme, from April 2026 they will have to report their taxes on a quarterly basis and, even worse, they will have to use third party software to report their earnings. Add up all the cost associated with the switch and there is unlikely to be any change out of £500.
No one is claiming that it will raise any extra revenue, or that people working for themselves will have to pay more. It will just change the frequency of payment. It is as if a restaurant bought you the bill between each course and got you to fill in a form each time. It is completely pointless.
There are, however, two far bigger problems with the whole woeful plan. First, the costs will have to be passed on to customers. It may have escaped the 'Rolls-Royce minds' at the Treasury and HMRC, but we all rely on the services of the self-employed. Perhaps we rent an apartment from one of them, or we get one over to fix a leaking pipe, or they help us with our pension planning, or deliver a burger late at night.
If their costs go up, then they will ultimately have to pass that onto their clients in the same way that any other business has to. In turn, that will feed into inflation, and drive up prices for everyone. Next, it will force at least some people out of business.
There is already alarming evidence that the self-employed are leaving the labour market. Self-assessed income tax receipts, the money collected from people working for themselves, came in well below the Office of Budget Responsibility's forecasts earlier this year. The only explanation was that the self-employed are working less or opting for early retirement (or if they are purely digital, moving to zero tax Dubai). If we push up their costs even higher, that trend is only going to accelerate.
In reality, 'Making Tax Digital' is the perfect encapsulation of the modern British state in action. It is a completely pointless increase in red tape that costs lots of money, creates lots of hassle, and relies on software that probably won't work.
Perhaps worst of all, it punishes the hardest working and often most productive section of the workforce. There are still ten months before the scheme comes into effect, leaving plenty of time for the Government to scrap it – and yet right now there is absolutely no sign it is even considering that.
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