The Treasury has announced three measures for the self-employed ahead of tomorrow’s Budget, but IPSE says it’s the Employer NI rise that needs fixing.
- The Treasury has announced three measures for the self-employed ahead of Wednesday’s Budget: permanent higher mileage rates, parental pay for self-employed dads and partners, and a Carer’s Allowance taper.
- IPSE calls them a “positive start” but says they “only go so far”, and wants the Chancellor to reverse the Employer NI rise.
- Support is already available today, including Maternity Allowance and Carer’s Allowance, so you don’t have to wait for the Budget to claim.
The self-employed have been handed three early wins on the eve of the Budget, but the Association of Independent Professionals and the Self-Employed (IPSE) says they don’t go far enough.
Yesterday, the Treasury announced it will make higher tax-free mileage rates permanent, open up parental pay to self-employed dads and partners, and replace the all-or-nothing Carer’s Allowance earnings limit with a taper.
IPSE has welcomed all three as a “positive start”, but is urging the Chancellor to use the Budget to tackle wider pressures facing the UK’s 4.5 million self-employed, starting with a reversal of the Employer NI rise.
We break down what’s been revealed, what IPSE wants next, and the support you can claim right now while you wait for tomorrow’s big announcement.
Three Budget teasers that could help the self-employed
According to the Treasury’s GOV.UK press release, the three measures are part of a wider package of “everyday fixes” announced ahead of the Budget.
Mileage is the first. The government will lock in the 55p-a-mile tax-free rate for the first 10,000 business miles, and raise the rate beyond that from 25p to 35p.
Josh Toovey, Head of Policy and Research at IPSE, says this permanence means people “can plan their costs without wondering what’s coming next”. The higher rate beyond 10,000 miles matters too, he adds, because “those clocking up the most miles had been left furthest behind”. It “won’t make a litre of diesel any cheaper”, but it does let those who can’t work without a vehicle “keep more of what they earn”.
Self-employed dads and partners will also be brought into parental pay, as part of an extension to more than 150,000 additional parents a year. Reports say this means two weeks of support worth up to £194 a week. According to Toovey, this “corrects an obvious gap” and means more self-employed parents can be at home in those first weeks “without worrying about the bills”.
The all-or-nothing Carer’s Allowance earnings limit will also be replaced with a taper, so carers no longer lose their whole payment for going slightly over. IPSE’s research found the limit left most self-employed carers unable to claim, even though their income can swing from week to week.
Why IPSE says these positive steps “only go so far”
For all three wins, IPSE says they leave the biggest problem untouched. According to Toovey: “Welcome fixes only go so far.”
The group wants the Chancellor to reverse the rise in Employer National Insurance on Wednesday, which he says “has left businesses wary of engaging contractors and freelancers”. In other words, a higher mileage rate doesn’t help much if the work isn’t coming in.
He also wants the Budget to back that up with measures that make working for yourself “a more secure choice”. That’s a big ask for a workforce already juggling rising fuel costs and income that can swing from one month to the next, and it’s the one IPSE will be watching for most closely.
The three announcements are welcome, but they only tackle the edges of what self-employed people are up against. Whether the Chancellor goes further is out of your hands on Wednesday, but there is help available today.
The new measures are still to come, but some help already exists. These are worth checking while you wait:
- Maternity Allowance – Self-employed mums can already claim it if they meet the work and earnings rules. Check your eligibility on GOV.UK. Self-employed dads currently get no equivalent, which is the gap the new pay is meant to fill.
- Carer’s Allowance – If you care for someone for 35 hours or more a week, see whether you qualify under the current earnings limit. Keep weekly earnings records, as you’ll need them whatever the taper brings. Details are on GOV.UK.
- Mileage claims – Claim what you’re owed under today’s rules. Keep a dated log of every business journey, and check HMRC’s guidance on simplified expenses vs actual costs.
