Government Consolidation Package 2024

Government’s 2024 consolidation package – two preliminary observations: 1) “employment” of sole traders/”one-person SROs” (“contractors”) The state has announced that it will fight against “employment” of contractors. However, like last year (I wrote more here: https://lnkd.in/ekwhPBJQ), this year it is doing exactly the opposite. It favors contractors over employees: changes starting in 2025 (simplified): 🚩 Lower tax rate for “single person SROs” from 21% or 15% to 10%;
🚩 Reduced “single-person SRO” tax rate on dividends from 10% to 7%;
🚩 Higher ceiling on social contributions for employees;
🚩 Higher minimum pension for both sole traders and “one-person SROs”;
🚩 Higher child tax bonus for contractors (I have yet to see the wording here) And coincidentally, I was on TA3 this morning talking about this “schizophrenia”. More in the video by clicking through. I also address there when a contractor does and doesn’t. Take a look, maybe it will help direct you. Overall, this kind of unconceptual direction by the state distorts the “healthiness” of the business environment. Both in terms of (i) resource allocation (the entrepreneur spends his energy to identify and set up his “employees” as contractors) and (ii) the absence of a “level playing field” (the more successful is not the better, but the one who is willing to take more risk and succeeds). And that is not what a modern state should want. A modern state should look for conceptual solutions (e.g. to reduce the price of labour). 2) Financial transaction tax: this will be addressed in detail at our October Crypt conference 😎 (https://lnkd.in/eMaR7QNv)