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U-turn over NIC rises

15/03/2017

National insurance increases for the self-employed, outlined in last week’s Budget, have been dropped.

Chancellor Philip Hammond has said the government will now not increase Class 4 NICs from 9% to 11% over the next two years.

In a letter to Tory MPs he explained: “In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget.”

The ICAEW said that the disparities between the self-employed and employed still need to be addressed. The institute’s Frank Haskew explained: “With working practices and employment patterns now very different to how they were in the past, the time is right for a thorough review on the questions of how the self-employed should be taxed and what should be the correct balance of fairness between the tax systems for the employed and the self-employed.

“Matthew Taylor’s report on the future of employment, due in the Summer, needs to provide a clear strategic direction on these questions and make recommendations to help fix some of the long-term disparities between the two systems.”