Various bodies are calling on the Government to end the discrimination suffered by the self employed under the taxation system. Small businesses with under ten employees are the life blood of the country. The owners of these businesses take risks starting up and work hard to keep them running. Yet there is a disparity to how the self employed are taxed as opposed to PAYE workers.
INCOME TAX:
The self employed are not entitled to the PAYE credit that is available to PAYE workers.
This means the self employed start paying tax when they earn over €8,250 a year as opposed to €16,500 for PAYE workers.
UNIVERSAL SOCIAL CHARGE
The self employed must pay an extra 3% universal social charge (USC) on self employment earnings over €100,000 which the PAYE sector don’t.
If the business fails, job-seekers benefit is not available to the self employed as they pay a lower rate of PRSI. They must apply for the means tested job-seekers allowance. This alone could put off a PAYE worker who would like to go into business on their own.