U-turn, flip-flop, whatever you want to call it, there’s no getting away from the fact that Philip Hammond’s policy reversal on National Insurance is hugely embarrassing both for him and the government.
Just one week after the Chancellor reneged on a manifesto promise not to raise taxes, he bowed to pressure and announced that the hike in National Insurance Contributions (NICs) for the self-employed would not go ahead.
According to The Telegraph, Theresa May told Hammond that ‘we are reversing this – I don’t care how bad it is for you’. The news comes as welcome relief for millions of self-employed who were facing an increase in Class 4 NICs. Under the now defunct proposals, these payments were due to rise from 9 per cent to 10 per cent next April and 11 per cent in 2019. That would have affected self-employed earnings between £8,060 and £43,000.
This might seem like a small increase but it’s a tax rise nonetheless. Calculations
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