The government has announced that the National Insurance Contributions (NIC) Bill expected this autumn, will be put back to 2018 and the NIC changes it is to enact will now take please a year later, from April 2019.
The announcement was made by Andrew Jones, the Exchequer Secretary to the Treasury, on 2 November in a House of Commons Written Statement
“The Government is announcing today that it will introduce the National Insurance Contributions (NICs) Bill in 2018. The measures it will implement will now take effect one year later, from April 2019. This includes the abolition of Class 2 NICs, reforms to the NICs treatment of termination payments, and changes to the NICs treatment of sporting testimonials."
“The Government has decided to implement a one year delay to allow time to engage with interested parties and Parliamentarians with concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits. The Government has committed to abolishing Class 2 NICs to simplify the system, so it is therefore right to take the time to ensure that there are no unintended consequences for the lowest paid.”.
One potential drawback of delaying the Bill and so putting back the implementation date is that businesses may be confused by NIC changes come into effect later than tax changes. It is however widely welcomed that the government is undertaking to engage on the impact of the changes to self employed NIC for lower earners.