Self Employed – Government U-Turn Over NI Increase
The Chancellor has said the Government will not proceed with plans to increase National Insurance rates for self-employed people, as announced in the Budget last week. Philip Hammond admitted the proposals breached the spirit of the Conservatives’ election manifesto. In a letter to Tory MPs, he said that while the changes are justified the Government has chosen not to go forward with the rise in “class 4” national insurance contributions. The Telegraph’s Tim Wallace warns the self-employed not to celebrate just yet as the Chancellor will now need to fill a £2bn hole in the public finances. Meanwhile, accountants have suggested that the Treasury is likely to recover much of the money by focusing on personal services companies. Philip Aldrick in the Times suggests that the IR35 accounting rule could be extended.