U-turn on self-employed NI contributions increase

Small business owners and self-employed workers have today been told that the planned increase in national insurance contributions for the self-employed announced in the budget will not go ahead.

There was a fierce backlash to the announcement by Chancellor Philip Hammond, which would have seen self-employed workers paying Class 4 National Insurance at 10 per cent as of April next year, with a further rise to 11 per cent scheduled for April 2019. Mr Hammond had said that the move would help bridge the gap in tax paid between employed and self-employed workers, and would generate revenue of approximately £645million by 2019-20.

Small business owners and self-employed workers reacted angrily to the proposed change, saying that it ignored the level of risk involved with self-employment, as well as the lack of benefits such as sick pay and holiday entitlements that employed works enjoy. Mr Hammond has said that the still believes the change would have provided for a fairer tax system, but decided to drop the increases "in the light of the debate of the last few days."

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