Think Tank Questions U.K. ‘Tax Breaks’ for Self-Employed

U.K. tax authority data suggests that the structure of income taxes is encouraging people to choose self-employment over more productive employment, as well as leading to revenue losses, the Institute for Fiscal Studies said.

Analysis of HM Revenue & Customs records found a “huge churn in the self-employed population,” reflecting the fact that most sole trader businesses close quickly, the IFS said in a July 9 report. A fifth of newly set-up sole traders are no longer trading after their first year, 60 percent have ceased trading by year five, and 80 percent have ceased after 12 years, the IFS noted.

My news story for Tax Notes Daily International (paywall), July 10:

Think Tank Questions U.K. ‘Tax Breaks’ for Self-Employed