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Contracting Blog

National Insurance Contributions for the Self-Employed Not to be Raised

05/10/2017

We repeatedly seem to be reporting on contractor’s disappointment in British government and how they fail to deliver on promises and recognise the unique aspects of the industry and support this.  In the spring budget Chancellor Philip Hammond personified these complaints by completing reversing on election promises by announcing rises in the national insurance contributions (NIC) for self-employed.  However, in a rare victory spurred by government and public outrage alike the chancellor has retracted these highly unpopular increases.
Proposals were that the NIC’s for self-employed workers were to rise from 9% to 10% in April 2018 and to 11% in April 2019.  However, this sparked wide spread media coverage centred around the Conservatives manifesto pledge in the 2015 general election not to raise income tax or NIC for five years.  Hammond upon withdrawing the proposals stated that he still thinks the self-employed NIC is inconsistent with permanent workers and therefore too low, however he acknowledged that raising them in this parliament was inconsistent with the Conservative party’s election manifesto.  Hammond faced further criticism over his U-turn stating that if he had consulted on the increases before announcing them in the budget he would have been spared the embarrassment of having to back down on this matter.
The embarrassing affair has only highlighted the need for proper consultations before publicising changes to current tax policies
 



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