There was welcome news for the self employed last week after Chancellor of the Exchequer Phillip Hammond did a u-turn and decided not to raise National Insurance Contributions (NIC) for them. This was after the Chancellor came under enormous pressure from his own party to change his budget announcement on NIC for the self employed. This is certainly a humiliating climb-down for both Hammond and the Prime Minister Theresa May. The rise would have broken a key Conservative manifesto pledge claimed many Tory MP`s and after a great deal of negative publicity the Chancellor announced that the proposed rise was going to be scrapped.
National Insurance Contributions For Self Employed
The rise in NIC for the self employed would have affected approximately 2.5 million people across the UK. This would have led to them paying an extra £240 per year. When the rise was announced it was stated that a move to abolish the Class 2 category would reduce the number of people losing out financially to around 1.6 million. They also said that nobody earning less than £16,200 would be worse off after the changes.
But the rise has now been shelved and Mr Hammond said in a letter to his MP`s that: “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.”
Speaking on the about turn Labour leader Jeremy Corbyn said: “Seems to me like the Government are in a bit of chaos here. A budget that unravels in seven days, a Conservative manifesto with a very pensive Prime Minister on the front page saying there would be no increase – a week ago an increase was announced.”
The quotes have been taken from an article on the Independent website and you can read the full article at the following link: No Rise In National Insurance For Self Employed
If you are self employed and you want help with your tax returns and/or bookkeeping please give us a call for an informal chat and some expert advice on 028 3752 2909.