Today the Chancellor, Philip Hammond, announced that he would not proceed with plans to increase the rate of Class 4 National Insurance Contributions (NICs) paid by the self-employed that he announced in the Spring Budget last week. The proposed change would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, with the aim of bringing the contribution paid by the self employed closer to the 12% currently paid by employees.
The proposed increase prompted an angry reaction - including some Conservative MPs as it appeard to contradict the 2015 Conservative election manifesto promise of not not increase certain taxes, such as National Insurance.
Mr Hammond 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.”
Class 2 National Insurance Contributions will still be scrapped as initially planned.