Spring Budget U-turn

There has been much discussion over the fact the Chancellor had announced the increase of National Insurance (class 4) rates for self-employed people in the Budget last week. Mr Hammond’s Budget announcement would have increased Class 4 NICs from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees. Many felt this was at odds with the commitment not to put up National Insurance, income tax or VAT and the Chancellor faced a barrage of backlash from those unimpressed by the announcement.

Less than a week later and the Chancellor has taken a ‘U-turn’ and dropped the plans to increase National Insurance rates for self-employed people.

Our Head of Taxation, David Morrison comments, ‘Given that the UK is seeking to encourage small business to support future prosperity, this U-turn is hugely welcome’.

The Chancellor intends to use the Autumn Budget to set out further measures to “fund in full” the £2bn lost from NICs.