During his first Budget on 8th March, new Chancellor Phillip Hammond announced to the world that he would level the playing field between employees and the self-employed by increasing Class 4 National Insurance Contributions from 9% to 10% from April 2018 and then to 11% from April 2019. In justifying this change he explained that the self-employed are now entitled to more generous State Benefits than in the past, and thus the NIC rate should be increased towards the 12% Class 1 NIC rate paid by employee’s.
However, this was in fact contrary to the Conservative Party manifesto pledge not to raise income tax, national insurance contributions and VAT during the life of the Parliament and since the announcement the Government have bowed to political pressure and decided not to proceed with this proposal. However with the next general election set for 8th June we will wait with bated breath for a possible increase shortly after!
As previously announced, flat rate Class 2 NIC contributions, now £2.85 a week, cease on 5 April 2018.