Wales politics

Farmers hit badly by self-employed tax rise, union says

Farm Image copyright Getty Images

Increases in national insurance contributions for self-employed people will hit farmers "badly", the Farmers Union of Wales (FUW) has said.

Chancellor Philip Hammond has faced accusations that the tax increase in Wednesday's budget broke a Tory manifesto pledge.

The union said the majority of Welsh family farms may be affected.

The UK Government said differences in what employed and self-employed people pay can no longer be justified.

FUW Managing Director Alan Davies said: "Why is it that tax is being increased for those hard working individuals, some of whom only make a profit just over £8,000, whilst at the same time corporation tax is falling?

"This increase will hit farmers across the UK badly."

Mr Hammond announced on Wednesday class four National Insurance contributions (NICs) paid by self-employed people who earn profits of £8,060 a year will go up to 10% from 9% and to 11% in April 2019.

With the abolition of class two contributions, the charges mean NI payments for self-employed people would be on average 60p a week higher.

The FUW said the increase would hit low and middle earning self-employed people, with the majority of Welsh family firms classed as such.

'I will apologise'

Employed staff on £32,000 a year pay £6,170 in NICs, jointly with their employer, compared with £2,300 for the self-employed.

The Welsh Secretary Alun Cairns has denied the Conservatives had broken its manifesto promise not to increase VAT, National Insurance contributions or income tax.

But Guto Bebb, a minister in his department, told BBC Radio Cymru it did break that pledge.

"I believe we should apologise. I will apologise to every voter in Wales that read the Conservative manifesto in the 2015 election," he told Post Prynhawn.

The Treasury has been asked to respond to the Farmers' Union of Wales comments.

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