Top News

Not content with battering British businesses with additional costs and red tape, ministers have the country's sole traders in their crosshairs as they persist with rolling out their hugely damaging new taxation scheme for the self-employed next month. We already know Labour is no friend of business or entrepreneurship.

The facts speak for themselves. Chancellor Rachel Reeves' last two Budgets saw chunky minimum wage increases and a rise in the amount of National Insurance Contributions payable by employers. When you make it more expensive for businesses to hire people, then they recruit less, which is why the UK unemployment rate sits at 5.2% - a five-year high.

Roll into this a frankly pathetic growth estimate for the UK's economy this year of just over 1%, and it has never been clearer that Labour do not have a clue when it comes to achieving serious economic progress. Anyone who is not a dyed-in-the-wool leftie knows that growth comes from the business sector, not from irresponsible Government borrowing or some kind of magic money tree.

Against this backdrop, you would hope that Labour would see the damage it has already inflicted on the economy and change tack, but they remain committed to going after more than three million sole traders in the UK by forcing them to sign up to HMRC's Making Tax Digital scheme.

This piles on more paperwork and costs for an individual who is just trying to make their way in the world and earn a few quid. From plumbers and website designers to mechanics and cake decorators, sole traders or the self-employed, are risk takers who believe in paying their way and find working for themselves a better option than working for a large business or organisation.

They are the proper grafters of Britain who do not have the luxury of a cushy public sector job with duvet days and a gold-plated pension. This sector of workers enjoys the freedom that being a sole trader gives them, but have to remain creative and inventive to keep the work coming in, whilst not receiving sick pay or holiday pay from any employer.

The latest figures from IPSE, The Self-Employed Association, for 2024 show that the solo self-employed contribution to the UK economy (including limited companies with zero employees) stood at £366billion which should leave nobody in any doubt about the role these grafters play in paying into the Treasury's coffers.

You would hope that, given this vast contribution made to the UK's economy by Britain's solo business operators and sole traders, they would be supported by making the admin side of their operations as simple and less time-consuming as possible, but not necessarily.

The Making Tax Digital project will now require a legal submission of an income/expenditure summary to HMRC every three months (quarterly), as well as an annual tax return. Users will need to use HMRC-approved software available from a private company as HMRC will not be providing its own technology - this is estimated to cost around £350 in the first year.

From next month, the requirement to submit details this way will hit sole traders with an income of more than £50,000 with the threshold falling to £30,000 from April 2027 and £20,000 from April 2028.

These thresholds show that even those who might earn additional cash from some kind of side-hustle to top up their main income will be impacted. The new system also requires landlords to report their rental income this way too which explicitly shows that Labour really has it in for those who are lucky enough to have assets as well as those who are managing to make a living out of a solo business.

Andrew Griffith, Shadow Secretary of State for Business and Trade, says: "Pressing ahead with 'Making Tax Difficult' is just the latest example of a government that neither understands nor cares about business. Small businesses and the self-employed are the backbone of Britain but they are under constant assault at the moment."

He is right - it has never been clearer that Labour either does not understand this or simply has an ideological dislike for anyone who sets their alarm clock early, takes risks, hustles for custom and works late into the night and at weekends just to earn themselves a living without having to rely on the state to pay the bills. Businesses of all sizes have suffered at the hands of this government and if Rachel Reeves is serious about growing the economy she should be supporting this nation's sole traders, not bashing them with petty bureaucracy and greater costs.