Exactly a week on from the Chancellor’s budget speech, it would appear that plans to increase National Insurance contributions in April 2018 from 9% to 10%, with a further 1% increase planned in April 2019 have been dropped.
Had the changes gone ahead, sole traders and partners whose profit exceeds £16,250 a year would have seen their NIC bills increase overall. It was estimated to cost an extra £282 a year for a sole trader earning £30,000 and £1,000+ for those earning £50k and over
The Chancellor – Philip Hammond, is set to explain the reasons for this unexpected U-turn later today, but the root of his change of heart appears to be the furious backlash by Conservative backbenchers, who accused him of breaking a general election manifesto commitment not to put up National Insurance, income tax or VAT.
Whatever the reasons, it is bound to be welcomed with relief by many the UK’s self employed who were left with mixed feelings from the raft of announcements made last week which were generally seen as a bit of a harsh treatment of the UK’s small business owners and entrepreneurs.