Home News Budget boost for Education as self employed suffer tax rises

Chancellor Phillip Hammond wisecracked his way through one of the shortest Budgets in recent years as he unveiled funding for another 110 new free schools and a £500m a year of additional funding to give technical education a boost. He also revealed a tax raid on the self-employed to raise an extra £145m by 2022 through a series of national insurance contribution (NICs) rises and a reduction in dividend tax free allowances..

The Chancellor told Parliament that as the UK begins the formal process of exiting the European Union, the Spring Budget put economic stability first. Following a period of robust economic growth, record levels of employment and a falling deficit, it set out restoring the public finances to health. The Budget was also building on the Industrial Strategy to tackle the UK’s productivity challenge.

Funding for another 110 new free schools, on top of 500 already announced, was confirmed. Thirty will open by September 2020. £216m will also be invested in school maintenance

More than £500m a year is to be spent on new-style technical courses that offer an alternative route than A-levels into many careers. Construction was declared one of the 15 sectors in line to get a T-level’, which is a new qualification being pushed to increase the number of technical and vocational skills.

The main rate of Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and to 11% in April 2019 to reduce the gap in rates paid by the self-employed and employees.

Dividend allowance will also be reduced from £5,000 to £2,000 from April 2018, to reduce the tax differential between the self-employed and employed.

Brian Berry, chief executive of the FMB, said: “The Chancellor clearly understands that the UK won’t address the productivity challenge unless we rethink our approach to technical and vocational education. T-Levels could be the answer if they genuinely rival A-Levels in the eyes of parents, teachers and young people.

“In construction, we are suffering from a severe skills shortage and this is likely to worsen once we leave the EU and no longer have easy access to European labour. This £500 million funding announced for T-Levels is therefore a welcome and much-needed boost.

“A jump in National Insurance Contributions by 1% to 10% next year could send the wrong message to those individuals who are considering going it alone. The self-employed are the backbone of our economy and the Government should tread carefully here.”

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