Row rages on over tax changes for the self-employed

Thousands of UK families who depend on a single self-employed wage could lose as much as a sixth of their income, new research suggests.

The analysis by the House of Commons Library looked at the combined effect of the National Insurance (NI) changes announced in last week’s Budget and previous cuts to universal credit.

The findings are likely to pile fresh pressure on the Chancellor, who has faced a mounted backlash following the announcement that NI contributions were to increase for a sizeable number of self-employed workers.

When details of the policy were unveiled, Philip Hammond was accused of breaking a key pledge in his party’s 2015 manifesto and unfairly targeting those running small businesses.

A day on from the Budget, the Prime Minister was forced to announce that any tax changes would not be implemented before the autumn, in an attempt to stop the momentum of a growing rebellion on the Government’s own backbenches.

On Sunday, Foreign Secretary Boris Johnson sought to defend the measures outlined in the Commons last Wednesday.

“You have got to look at the full package that self-employed people are getting, and we will come back to that later in the year,” he told ITV’s Peston on Sunday programme.

The proposed changes were also endorsed by Matthew Taylor, who has been appointed by the Government to lead a review of employment practices. He argued the controversial reforms were “progressive”.

However, Owen Smith, the Labour MP and former leadership contender who had asked the Library to investigate the issue, remained highly critical.

“This was clearly the greatest mistake in Philip Hammond’s Budget and Labour should be focusing all our fire on reversing this measure in the coming weeks,” he said.