Chancellor’s u-turn on National Insurance rise welcomed

Tax Comments Off on Chancellor’s u-turn on National Insurance rise welcomed

In his Budget last week Mr Hammond proposed to increase Class 4 NICs for the self-employed from 9% to 10% in April 2018, and to 11% in 2019, to bring it closer to the 12% currently paid by employees.

Thousands of self-employed people across the Liverpool city region are breathing a sigh of relief after Chancellor Philip Hammond was forced into a humiliating u-turn on his plans to raise National Insurance contributions.

Click to watch Mersey business people offer their views prior to the u-turn.   

There was an immediate backlash in the hours that followed from entrepreneurs and business leaders across the country and a number of Conservative MPs.

Many said the Chancellor had reneged on the Tories’ 2015 manifesto pledge.

At the weekend Prime Minister Theresa May said the change would be delayed until the autumn but in the House of Commons on Wednesday afternoon, Mr Hammond scrapped the change saying he’d had a “change of heart”.

The u-turn was welcomed by business people in Merseyside.

Peter Taaffe, managing partner of Liverpool accountancy firm, BWMacfarlane, said Mr Hammond had been “put on the naughty step” by Mrs May.

“This stirred a shocked reaction amongst political peers and the public alike – both as to the impact on the millions of self-employed, and the breaking of their manifesto promises,” added Mr Taaffe.

“Certainly it gave concern to a number of our clients and people we work with and I certainly can’t remember the last time a budget stirred quite so much emotion.

“Just this week, I met with a number of self-employed business people voicing their frustrations on what had become, frankly, a matter of principal.

“Self-employed people don’t have the same benefits, the same protections as employed people so how can it be fair to close the gap in contributions?

“The Government now propose a consultation over the summer on the differences between employed and self-employed. So now it’s a matter of watching this space.”

And for further information on how these changes affect you please contact us.