- Written by Holly Masters
The Chancellor has announced a U-turn on the planned National Insurance Class 4 contributions increases that he originally announced in the Spring Budget on 8th March 2017.
There was a planned increase in the amount of NIC Class 4 payable (which is payable on the profits for self-employed individuals) from 9%, to 10% in April 2018 and 11% in April 2019. However, many argued, and the Chancellor has agreed, that this move was a breach of the ''spirit'' of the Conservative 2015 election manifesto.
This has been a welcome U-turn for many of the self-employed. Originally designed to close the taxation gap between the employed and the self-employed, many argued that the self-employed do not benefit from the advantages that employees do, such as paternity pay, sick pay, and holiday pay. These benefits are being reviewed this summer for the self-employed, but for the time being the U-turn represents a welcome move for sole traders and partnerships.