Government backtracks on Class 2 NIC

Hammond U-turns on Class 2 NI pledge Chancellor Philip Hammond has scrapped the Government’s pledge to abolish Class 2 National Insurance contributions. The move, to raise an extra £435m a year, would have provided a tax break for 3.4m self-employed people. "A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially," he said. Sam Dumitriu however, head of research at the Adam Smith Institute, complained that it is a stealth tax rise: "Philip Hammond didn't win the argument in Parliament on raising Class 4 Nics. As a result, he is going back on the scrapping Class 2 as a backup," he asserted. Elsewhere, Mike Cherry, chairman of the Federation of Small Businesses, said: “The self-employed community has been let down today, missing out on a promise to reduce their tax burden. This raises serious questions once again about the Government's commitment to supporting the self-employed. The move is extremely disappointing and flies in the face of tax simplification.”