Tuesday 25 January 2022

Cabinet plans to increase tax on freelancers will boost welfare claims

Thousands of freelancers are likely to stop working and claim social security benefits instead if the government goes ahead with plans to scrap a special tax break for the self-employed, Trouw reports on Wednesday.

Research by self-employed organisation ZZP Nederland and the FNV freelance union shows some 9% are considering winding up their companies if the tax break is removed.

If just half of them actually do so, there will be an increase of 320,000 claims for welfare benefits, which will cost €509m a year, Trouw calculates. The cabinet says the planned changes will save €500m a year.

Currently, the self-employed are able to deduct €7,280 from their taxable profits, but the government is considering scrapping the tax break.

It argues that freelance workers often pay several thousands of euros less in income tax than employees and that many companies use freelancers to avoid taking on permanent staff.

Some 800,000 people in the Netherlands are currently freelancers, known as ZZP’ers in Dutch.

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