IPSE: “Government is making it almost impossible to work as a freelancer”

IPSE has warned that after the financial damage of the pandemic, the government’s new dividend tax hikes are making it “almost impossible” to be a freelancer working through a limited company.

IPSE pointed out that a key group affected by the dividend tax changes would be freelancers working through limited companies, who were excluded from support during the pandemic and have just been hit by the highly damaging changes to IR35 self-employed taxation.

Andy Chamberlain, Director of Policy at IPSE (the Association of Independent Professionals and the Self-Employed), said: “After the financial damage of the pandemic, exclusion from support and the changes to IR35 taxation, this new tax hike on dividends will make it almost impossible for freelancers to continue to work through a limited company. To limited company directors – from project managers to graphic designers – this is salt in a year of wounds.

“The increase in National Insurance for sole traders will also be deeply damaging to the wider self-employed sector. While social care is of course crucial for the country, after the financial devastation of the pandemic, it is simply not right that hard-working and often struggling people – particularly the scarred self-employed sector – should be paying for it. These changes will squeeze the battered self-employed community – limited companies and sole traders alike.”