Financial Planning firm Quilter has hit out at the Labour Party following the launch of its manifesto, claiming the party’s tax plans would hit self-employed workers.
The manifesto, which featured a pledge for a maximum State Pension Age of 66, was released yesterday, in Birmingham.
Quilter’s tax and Financial Planning expert Rachael Griffin believes action to bring tax on dividends in line with Labour’s income tax plans will end up clobbering the UK’s five million self-employed people.
She said: “Labour’s plans around taxing dividends could end up impacting a greater number of people than just the corporate executives it wants to target with its policies.
“There are around five million self-employed workers in the UK and a number of these will pay themselves through dividends taken from the companies they run to provide their services, and as such this will have a significant impact on the way they run their businesses.
“The proposal aims to bring the taxation of dividends in line with Labour’s plans for income tax.
“Given its wish to increase income tax rates on higher earners, this could end up being a significant hit to those that provide services to the economy.
“However, these are people who already do not receive access to employment rights such as employer contributions on pensions or entitlement to holiday pay.
“As such, should we be in a position where Labour achieve a Parliamentary majority, many of these workers will need to assess their employment situation and work out what status will be most beneficial to them.
“Furthermore, given the tax free allowance on dividends has been slashed in recent years as it is, financial advice will be crucial for those looking to navigate what is already a complicated area of personal finance.”