Tax subsidy scrutinised

The Treasury has estimated that a tax subsidy for the self-employed has risen from £1.7bn in 2011-2012, to £2.9bn this financial year. Oxford University professor of taxation, Judith Freedman, calls the increase “staggering”. Under the subsidy, the self-employed contribute less to national insurance as they are eligible for fewer benefits. Professor Freedman said: “There is a big subsidy being paid by employees to the self-employed. It is not a particularly well targeted way of encouraging certain types of activity.”

Source: Financial Times

Subsidy? When the self-employed pay less in National Insurance Contributions because they are eligible for fewer benefits? That seems to be a novel usage of the word “subsidy”. I pay less for my groceries than the family next door because…er… I buy less food. Does that mean that in their weekly trip to Waitrose (we do have certain standards in our road, you know) they are subsidising me? I had never thought of it in that way. And does my sister-in-law’s remarkable addiction to buying shoes represent a subsidy to those of us who have been wearing the same pair of solid black Oxfords since time immemorial?



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

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