What Have They Got Against The Self-Employed?



“The self employed have a taken a hit again. I cannot understand why this government would introduce an 11 per cent Universal Social Charge just for the self employed. I don’t understand what this government have against the self employed.

Why do the self employed pay tay tax at 11 per cent but if you’re in a PAYE job and you”re not taking the risks of the self employed you only have to pay eight per cent. I can’t understand that.”

Independent TD Stephen Donnelly (at 4.50) speaking during the Budget 2015 debate in the Dáil following the government’s decision to introduce a new 8% USC rate for anyone earning more than €70,000 and a new 11% rate for the self-employed earning more than €100,000.


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56 thoughts on “What Have They Got Against The Self-Employed?

  1. Pretendgineer

    I had assumed this was aimed more at consultants and their ilk.

    Doesn’t really fit with their ‘job-creators’ shtick.

    1. Mayor Quimby

      Why? Because the only self-employed people you know are consultants?

      Labour Party have been gunning for productive self employed people for quite a while

      1. Medium Sized C

        Ah bollox to that partisan nonsense.
        Consecutive governments have failed the self employed for decades.

        Crappy tax arrangements and a complete lack of social support are the norm for self-employed people and have been under every damn party who have been over.

        The reason they do it is because they know the majority don’t give a shite.

        1. Mayor Quimby

          Deputy Arthur Spring, member of the Committee on Finance, Public Expenditure and Reform, has called for the Universal Social Charge to be made more progressive, by extending the 3% surcharge to all incomes over €100,000.

          “Addressing the USC anomaly, where the 3% surcharge is currently targeted solely at the self-employed over €100,000, would allow the government to achieve a more appropriate contribution from the highest earners in society.

          “In a response to my Parliamentary Question, Minister Noonan has confirmed to me that if we applied this surcharge to all incomes over €100,000, gains to the Exchequer would amount to €71m. This would represent a considerable reduction in the deficit on the revenue side.

          “This is an issue of solidarity, and my proposal would help shift the burden of the USC to higher earners.

          “In last year’s Budget, 330,000 of the lowest income earners were taken out of the USC. Focus must now turn to higher earners. What is needed is to make the tax more progressive at the top, by applying the 3% surcharge to all incomes over €100,000, gaining €71m for the Exchequer.”

      2. Pretendgineer

        Um, no. Sorry to disappoint but I said nothing of the sort, I said I assumed it was *aimed* at consultants and their [independant contractor] ilk (of which I am one.)

        Nor did I agree with it, Sinabhfuil. I think it should be equal for all over €100k and progressively increased for every €100k thereafter. But that is beside the point.

    2. Sinabhfuil

      It doesn’t matter what ‘ilk’ it is; the tax is unequal. Set a tax for all earning over €100k, not for only those who are self-employed.
      One rather uninformed politician said on the radio yesterday that the self-employed paid their tax later than PAYE workers, and had the money to play with; he hadn’t heard that the self-employed now pay it earlier through “preliminary tax”; maybe if that’s his justification, the taxes should be reversed, with the risk-taking self-employed paying 8% and the secure public servants and executives with their big fleecy pensions awaiting them and their increments and bonuses paying 11%?

      1. anomanomanom

        Hope the pension and increments were aimed at the executives. Believe me the public sector pension for the vast majority is one of the worst in the country. And there are no increments any more

        1. Ernie Ball

          For those following at home: the mob has spoken and they don’t like bonuses for those working in the public sector or semi-States (see latest Irish Water thread). They also don’t like increments. Conclusion: nobody in the public sector should ever get a pay rise.

  2. Zynks

    …and then if the self-employed run out of business they are not entitled to job seekers benefit.

    But still supposed to be the best small country in the world to do business

    1. Medium Sized C

      Yes. This. +1

      Feckin disgrace is what it is.
      An actual disgrace, as distinct from an internet disgrace.

    2. Padi

      It’s an embarrassment, we allow the crazy communists run the tax system, in virtually every other developed country the self-employed and entrepreneurs are given significant tax benefits.

      We need to stand up and say it is good to be successful, if you do well you should be rewarded by the system not shamed as some evil ‘rich’ person. Young people across the country should be encouraged to extend themselves, take risks and not be ashamed of achievement.

  3. Spartacus

    More of the same. Successive governments have treated the self employed with contempt, FF were just as bad.

  4. ahyeah

    I suspect it’s because self-employed have way, way more scope to evade tax. If a self-employed person is declaring €100,000 in earnings, you can be pretty sure he’s earning €150,000.

    1. Spartacus

      Revenue will be only too delighted to relieve you of any evidence you may have in support of this claim.

    2. Padi

      Simply a lie peddled by socialist begrudgers. Being financially successful is a good thing, achievement should be celebrated.

      1. Ernie Ball

        Yes, I know I for one have never encountered tradesmen who were unwilling to take a cheque or issue a receipt. It simply never happens and any suggestion that it does is a scurrilous lie promulgated by socialists.

    3. Mayor Quimby

      just because you’re a lying fraudster doesn’t mean everyone else is.

      besides unless you’e in a cash business that’s impossible

  5. Just sayin'

    Isn’t it for “self-employed” people earning more than €100,000 a year? I know quite a few of those, happy to be on €500 a day rates and using creative accountants to make it work for them.

    1. Odis

      Then surely, the government should crack down on “creative accountancy”, rather than make the biased assumption – that the self employed are all fiddling anyway. – so we might as well cream them for an extra three percent.

      1. Just sayin'

        Oh, if the Government could crack down on creative accountants the world would indeed be a better place. Not that easy though.
        Obviously, a significant proportion of self-employed were deemed not to be genuinely “self-employed” and those earning over €100,000 will pay more tax. Is that so bad?
        The real self-employment scandal is that someone who tries to set up their own business and fails is not entitled to proper social welfare benefits.

  6. Mysterymeat

    Not much chance of them applying this to PAYE workers, since the senior civil servants drafting this will almost all be on over €100k.

  7. Mayor Quimby

    Clearly there are no self-employed people commenting yet.

    Revenue have launched a crackdown on contractors working permanently in one particular company. Expenses are under the Microscope.

    Just because your scummy mate was taking the pizz and bragging about it doesn’t mean all self employed people are as dishonest

    1. ReproBertie

      That contractor crackdown has been a scare story among contractors for years now. The most I’ve heard that makes it in any way official was an audit on contractors claiming mileage and subsistence based on travelling from their homes to the site of their contracts. That was fraud and Revenue were right to investigate it. I can’t see any reason why contractors would object to it.

      1. Karl Monaghan

        They’ve also been cracking down on contractors who only have a single client that they’ve been with for over 12 (or is it 11?) months – basically the contractor should have been an employee and there various tax implications.

        1. ReproBertie

          I have heard that Karl but have yet to see any evidence of it. The only experience I had of it was a bunch of auditors telling one company that direct contractors should have their contracts taken on by a larger firm so as to make them indirect. This was done and then the auditors bought the so-called larger firm thus hoovering up an extra income for themselves.

          Revenue have ongoing contracts with Accenture. Many of the contractors, employed by Accenture, are in Revenue for much longer than 12 months. I’d be very interested to know how that arrangement differs from Revenue having a single specialist contractor for 13 months.

          1. Karl Monaghan

            I have – Revenue audited a friend’s company mid last year and were particularly targeting the contractors they had. It ended up with both the contractors and the company settling with Revenue and contractors becoming employees retrospectively.

          2. ReproBertie

            Well fair enough then. Maybe I should just get a contract with a government department and become immune from things like audits and rules.

      2. Mayor Quimby

        I know they were right to investigate it. It gives all self-employed people a bad name and gives the the socialists carte blanch to screw them over

    2. fmong

      “Clearly there are no self-employed people commenting yet.”

      they’re all still in bed

      JOKE, I JOKE…

  8. Zynks

    “…we have the second highest healthcare expend on earth…”

    Is that correct? Does anyone have a source that confirms it?

  9. timble

    Do you know a lot of self employed people earning over 100k? I certainly don’t. This uSC rate harks back to when the USC was brought in at first. see here from 2010: http://www.todayfm.com/mobile/index.php?id=7434

    “The Finance Bill therefore had to be rushed through the Dáil – with a few hasty amendments tacked on to try and ease the public anxiety about the brand new charge Fianna Fáil had announced, weeks before their electoral meltdown.

    One of those amendments was the tweak which is back in the news today. Under the original plans for USC, someone earning €40,000 a year would have been hit with €2,118.80 in Universal Social Charge.

    Fianna Fáil bowed to pressure from those who said this was simply too much new tax for a struggling household to face – and so Brian Lenihan decided that a slightly lower rate of USC would apply to people on a medical card.

    Their higher rate of 7% was cut to 4% – saving them €719.52 a year.

    This cost the government around €80 million – which they made up by increasing the USC charged to high-earning self-employed people. Those people would then face another rate of USC – paying 10% on any income over €100,000. ”

    Also, Self employed don’t have to file their tax returns until November. PAYE workers pay it over on a weekly or monthly basis, which provides a cash flow benefit to self employed, hence PAYE tax credit.

    1. ReproBertie

      Many self employed people pay PAYE on a monthly basis. They also pay PRSI at a lower rate which denies them the safety net of job seekers’ should their company fail.

      1. Cian

        I’m self employed and PAYE. If I was a regular employee on the same net wage I’d have more after tax.

    2. Mayor Quimby

      What’s “knowing self-employed people over 100k” got to do with anything? I don’t know anyone with Parkinsons but that doesn’t mean they should be treated unfairly

      Cash flow benefit? Because of all the interest you earn in the mean time?

      I’ll bet you didn’t know that self-employed people must pay PRSI on all interest income – even if it’s nothing to do with the tax in reserve.

      The Nov filing is a preliminary filing for the whole year – so they’re paying tax on some of their earnings in ADVANCE. If much of you income comes at the end of the year that’s even more significant

      Self-Employed people aren’t entitled to dole, they weren’t even entitled to the free dental check-up that everyone else got!

      You’re bias is only matched by your accounting ignorance

    3. Karl Monaghan

      The also have to preliminary tax for the next year when paying in November which is:
      90% of your final liability for the tax year, or
      100% of your final liability for the previous tax year, or
      105% of your final liability for the pre-preceding tax year. (This option is only available where preliminary tax is paid by direct debit and does not apply where the tax payable for the pre-preceding year was nil).


      1. Mayor Quimby

        “next Year”?

        eh, it’s preliminary that of the year in question (i.e. you pay prelim tax for 2014 in November 2014)

  10. Starina

    because sure everyone knows that the self-employed are ruining the country, what with their job-creation, renovation of long-abandoned shop fronts and lack of ability to claim the dole.

  11. Louis Lefronde

    Much of the distaste for the Self-Employed goes back to the 1980’s and early ’90s when the cash economy was rampant owing to vey high taxes especially during the mid 1980’s. It was felt at the time, a huge number of the self-employed ‘dodged’ the bullet and didn’t contribute their fair share, while the PAYE sector were screwed into the ground.

    That was the 80’s.

    However, with increased Revenue powers and skills in detection, evasion is not nearly as bad today.

  12. Ronan

    I saw this TD buy a Lotto ticket around the corner from Leinster House on the morning of the budget. I thought that was kind of amusing.

  13. Ray Luna

    The self employed title also applies to all the one man and his dog professional classes, lawyers, doctors, etc, and I don’t think people are screaming out for more tax relief for them!

    Sorry Legal Coffee Drinker…

  14. Jordofthejungle

    No one appears to have noticed that this was exactly the same point raised by Lucinda Creighton in her Dáil speech reacting to the budget. Once again Stephen Donnolly and Lucinda are singing from exactly the same hymn sheet. Stephen Donnolly has long been suspected of quietly sympathising with much of the Reform Alliance’s “policies” and it is likely simply a matter of time before he joins Lucinda and her merry but half-baked band of Tae Party wannabes. He has certainly made no secret of his desire to be within a “party” given the limitations of being an Independent TD.

    If Lucinda does land the coup of luring Donnolly, which I think she will, it offers a very neat smokescreen to take the edge off all the others’ hardline social conservatism and less than convincing manner given Donnolly’s liberal credentials and erudition. Stephen Donnolly offers Lucinda the very best of optics and PR without the threat of Donnolly’s social views every attaining majority status in her nascent party. Indeed Donnolly could even indirectly facilitate her social outlook.

    Lucinda is desperate to secure a social liberal but fiscal conservative for the Reform Alliance. I do hope Donnolly does not take the poisoned bait…

    1. Unpredictor

      I’d vote for a socially liberal / fiscally conservative party but I don’t think what Lucinda sets up will ever be that.
      My personal experience is there seems to be more tax evasion going on and not just in the traditional cash trades. Over the summer I had a *solicitor* quote me an (exorbitant) price and a lower cash price for a small piece of work. She was pretty blatant about it too.

  15. Wayne Carr

    Self employed? People who have to fill out their own tax returns at the end of the year? Hummm, I wonder why the government might attempt to take more money from those who are doing their own taxes?

    I couldn’t offer my labour, without VAT, under the table if I work for a company. Is this true of self-employed people?

  16. RapidEddie

    Are all self-employed people underdeclaring their tax liabilities? No. But many are (I speak as someone who was self-employed for 12 years).

    Now we can have a “yes they are/no they’re not” to-and-fro, but in answer to the question “Why are they doing this?”, the reason is because the government/Revenue Commissioners believe that – broadly – it is the case that the self-employed don’t pay all the tax they’re liable for.

    This belief also drives tax policy in other areas – a series of poll taxes (a.k.a. head taxes) that nobody can hide from. Universal Social Charge. Water Charge. Local Property Tax. The government has come to the conclusion that it would be extremely difficult, not to mention probably inefficient, to try to track down all the missing income tax revenue. So they hit everyone with head taxes.

    You might disagree profoundly with the government’s position on the self-employed and tax, but I don’t think there’s any doubt that it is the starting point for pretty much all of their tax policy. “You’re going to dodge large chunks of income tax? Grand so. Until you’re willing to a grown-up about it, we’ll hammer you and everyone else with taxes you can’t dodge then.”

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