U-Turn on self-employed National Insurance Contributions (NICs)
Post Author:
Angie Harvey
Date Posted:
May 3, 2017
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Self-Employed National Insurance Contributions – for now
In his first Budget on 8 March, the new Chancellor Phillip Hammond announced that he would level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions (NICs) from 9% to 10% from 6 April 2018 and then to 11% from 6 April 2019. His justification is that the self-employed are now entitled to more generous State Benefits than in the past, and thus the NIC rate should be increased towards the 12% Class 1 NIC employee rate.
However, this was contrary to the Conservative Party manifesto pledge not to raise NICs during the life of the Parliament and the Government have bowed to political pressure and decided not to proceed with this proposal. However this measure may return in the next Parliament after the election on 8 June.
As previously announced flat rate Class 2 NIC’s, which are now £2.85 a week, cease on 5 April 2018.
