In last week’s budget, it was announced that National Insurance rates for the self-employed were to be increased. However, the plans have since been criticised for breaking a 2015 manifesto pledge.
Amidst the controversy, Philip Hammond told MPs in a Commons statement: “There will be no increases in National Insurance rates in this Parliament.”
The Chancellor explained his U-turn by stating: “It is very important both to me and to the prime minister that we are compliant not just with the letter, but also the spirit of the commitments that were made.
“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.”
If the original plans were to have come to fruition, it would have meant that Class 4 NICs would increase from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees.
If you wish to discuss any of the announcements from the budget, then get in touch, we’re more than happy to help.