Chancellor Philip Hammond has backed down over his planned hike in National Insurance Contributions (NICs) for the self-employed — a move welcomed by the organisation representing small businesses.
In a letter to Conservative MPs, the Chancellor said he would not proceed with the planned increase in Class 4 NICs which he announced just a week ago.
‘There will be no increases in NICs rates in this Parliament,’ he said, sticking to a Conservative Party manifesto pledge in 2015.
The Federation of Small Businesses (FSB) said this marks a victory for the economy’s strivers and risk-takers.
The organisation claims the Chancellor has listened to the FSB and realised that targeting the self-employed with this tax-grab was “nonsensical”.
Doug Balderson, FSB Regional Chairman, Greater Lincolnshire and Peterborough said: “We are delighted for our members and all the nation’s self-employed that the Chancellor has recognised the strong opposition to this measure, admitting it was against the spirit of the Tory manifesto on which his party stood, and has now decided to scrap it for the duration of this parliament.
“The army of self-employed make a massive contribution to the UK economy. We have consistently argued, since this measure was announced last week, that a tax-grab on the genuine self-employed – the hairdresser, electricians and plumbers – makes absolutely no sense.
“We look forward to engaging with the summer review into the benefits that the self-employed need to be able raise families, pay the bills when sick, and prepare for retirement. We need to see what other measures are brought forward to make sure they support the UK’s small business and self-employed community.”