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Chancellor U-turns on NICs increase for self-employed

The chancellor has scrapped a planned increase in national insurance contributions for the self-employed following a post-budget backlash

Chancellor Philip Hammond has scrapped a planned increase to National Insurance Contributions (NICs) for the self-employed just one week after introducing the measure in the Spring Budget.

In a letter to Parliament on 15 March, Mr Hammond said he would no longer be increasing class 4 NICs for the self-employed, due to rise 10 per cent from April 2018 and 11 per cent in 2019, following a fierce backlash against the measure.

The planned increase, which was unveiled in the Budget on 8 March, aimed to align taxation for the self-employed and employed. Only self-employed people with annual profits of more than £16,250 would have ended up paying more, but over four years it would have amounted to roughly £2bn for the government.

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