The government is planning to cut the freelancer tax break in order to help pay for tax cuts for the population at large, according to the latest leaks from the ongoing budget negotiations.

Sources in The Hague have told Dutch newspapers that the tax break – currently €7,280 – will be reduced to €5,000 over a 10-year period. The measure is aimed at freeing up more money for general tax cuts as well as reducing the perceived financial inequality between freelancers and people in regular jobs.

Opponents of the tax break, who include the government’s CPB think-tank and trade unions, say it is unfair to give freelancers a discount on their tax bill because it makes it more attractive to become an independent contractor.

Freelance lobby groups say the tax break is compensation for the extra expenses they have to pay, including pension and invalidity insurance and additional health insurance costs. Freelancers are responsible for the employer contribution to health insurance as well as regular premiums.

Meanwhile, the Financieele Dagblad reports that freelance organisations are also concerned about the rise in brokers specialising in hiring in self-employed workers for rock-bottom fees.

The paper says multinationals and government departments have farmed out the administration of some 150,000 freelancers to brokers, who then become responsible for payments.

Cash flow

Several hundred ING freelancer contractors have not been paid since June because of cash flow problems at its broker TCP, the FD said.

‘The added value of this link in the chain is nil,’ Denis Maessen of freelancer lobby group PZO told the paper. ‘The end client only wants to get rid of risks and bring down fees.’

The government’s roads department RDW, for example, has contracted out its freelancer management to a company charging just one cent for every hour worked.