• by Sean Hargrave , Staff Writer, March 9, 2017

How could the Government be so stupid, so shortsighted? There is the political side of the Spreadsheet Phil's GBP2bn tax swoop on the self-employed breaking a manifesto promise and putting off work to tax the huge companies that hide money overseas rather than pay tax on it in the UK. All mentioned in the same speech within minutes of one another. Yes -- Facebook, Amazon, Starbucks and Google, I'm talking about you and others like you.

Then there is the mind-boggling stupidity of punishing the very people who vote for you and that you need to build a flexible economy. Let's keep to that for now and assume we all accept that the Tories have broken a manifesto promise not to increase National Insurance. It's there in black and white. The Chancellors' squirming around the issue doesn't hide the simple fact that he has broken a promise. Hilariously, one Tory MP told Sky News that the manifesto is a small document and you can elaborate on it in speeches and subsequent legislation. But as a famous President once quipped: "Read my lips, no more taxes."

So as for marketing, how are we affected by the Chancellor shooting his party and its supporters in the foot? Well, put it this way. Do you think Brexit uncertainty means employers want more flexibility or less in their workforce? Or more particularly for marketing?

As I blogged the other day, following a really interesting talk with Britvic's marketing director, do you think the huge teams in swanky London offices working on massive retainers is here to last? Will we see more of it? Or less? If you answered that employers want a less flexible workforce to get through Brexit and brands want to keep chucking huge piles of cash at massive teams in offices far more trendy than theirs, call your doctor and have a lie down.

The truth is that employers more than ever need flexibility and that's exactly what self-employment provides. The future of the advertiser and agency relationship is clearly going to be one based more on project work, dare I say zero based budgeting. So, what kind of work force is that going to need. Huge ranks of employed staff members or slimmed down teams bringing in freelance talent as and when needed? 

What does the government do to encourage these people who are taking on the risk of whether they get work on themselves, putting the confidence in their skills to make a decent living. It singles them out for a 2p tax increase. You can dress it up however you like but putting a penny on National Insurance next year and another penny the year after is a tax hike of two pence. It has been worked out as costing the average self-employed person £250 per year, but that will include a lot of low earners. The kind of seasoned pro you want to hire for a project will likely see a tax hike way more than double that amount.

Would it would be tempting to register as a company instead? Well, Spreadsheet Phil has that covered too. The annual dividend tax free allowance has been slashed from GBP5,000 to GBP2,000. That's effectively a tax hike of GBP1000 per year for a higher rate tax earner. Can you see what he did there? Yes, that's right -- if you're successful at what you do, he's taxing you more, no matter  which option you go for.

Note that this doesn't include the huge corporations that pretend to be doing business via Luxembourg or some offshore tiny island. No, the strivers who are providing the country with the flexible workforce it needs are the ones the Chancellor has single out for a shafting.

Now, before you get taken in by any of Spreadsheet Phil's lies on freelancers getting access to the same services so they should pay a similar rate as employed people, ask you self this. Where's the maternity pay, the sick pay, the paternity pay for a freelancer? Not to mention -- where's any form of pay when work dries up? Freelancers take this risk upon themselves and are taxed a little less than those who have all those benefits mentioned within their guaranteed income which now legally has to come with a workplace pension.

It's hard to imagine a group of entrepreneurs that are more likely, as an average across the country, to vote Tory rather than Labour. This makes it all the more mystifying that the Chancellor should punish a potentially loyal voter base and discourage flexible working at the very time when his party and the country, respectively, needs both.