15/03/17Shock National Insurance U-turn
In a shock move, that will come as a pleasant mid-week surprise to many, Chancellor Philip Hammond has announced that the government will not proceed with the increase in National Insurance contributions for the self-employed.
The main rate of Class 4 National Insurance contributions, applicable to the self-employed, was to be increased from 9% to 10% in April 2018, and then to 11% in April 2019.
The pressure being applied to the government during the last week has clearly had some effect, with many saying that the increase directly broke the Conservatives’ 2015 manifesto pledge.
In last week’s budget, the Chancellor stated that he firmly believes the difference between employed and self-employed National Insurance contributions is no longer justified. However, a letter to MPs shows a change of heart, with Mr Hammond saying he wanted to stick to the spirit of the governments manifesto pledge and has decided not to proceed with the Class 4 National Insurance contribution measures set out in the budget.
With more details, yet to follow, this particular U-turn, is going to be music to the ears of many self-employed workers.