Some of the UK’s 3.8 million self-employed* are set to benefit from revised NIC plans confirming Philip Hammond’s decision not to raise National Insurance contributions.
In last week’s last Spring budget Philip Hammond announced his intention to increase National Insurance Contributions – NICs – for some self-employed workers in a two-step phase to 2019.
He had intended to raise NICs on some classes of the self-employed from 9 per cent to 11 per cent by 2019.
However, this appeared to be in breach of the Government’s own General Election manifesto.
Following his decision to abandon these plans, Mr. Hammond defended his change of mind.
In a Commons statement, the chancellor told MPs:
“There will be no increases in National Insurance rates in this Parliament.”
Mr Hammond said he would use the Autumn Budget to set out further measures to “fund in full” the £2bn lost from NICs.
Reported in The Sun, he said:
“In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget.”
About 80% of self-employed workers will pay less National Insurance from April 2018, with the rest seeing no change after the government abandoned changes announced in the Budget.
Class 2 National Insurance contributions will still be abolished from April next year. They are paid at a flat rate of £2.80 a week by anyone making profits of more than £5,965 a year.