Plans to raise National Insurance rates for the Self-employed – originally announced in the Spring Budget – have been dropped.

In his first Budget on 8th March, 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 being, that the self-employed are now entitled to more generous State Benefits than in the past, and thus NIC rate should be increased towards the 12% Class 1 NIC employee rate.

Chancellor Philip Hammond has said the government will not proceed with the increases, which were criticised for breaking a 2015 manifesto pledge.  He told MPs in a Commons statement:

“There will be no increases in National Insurance rates in this Parliament”.

Hammond made promises to make no increases to NICs for the rest of this parliament; stating that the government would broaden the scope of a planned review into whether the self-employed should receive better paternity rights, to include other benefits too.

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