UPDATE: On 15 March 2017 Philip Hammond announced he would be dropping the proposed policy to increase Class 4 NICs for the self-employed, following the public and cross-party outcry that followed the Budget, and accusations that the Conservative Party had broken a manifesto pledge
In his Budget on 8 March 2017 Chancellor Philip Hammond announced that Class 4 National Insurance Contributions (NICs) for self-employed workers would rise from 9% to 11% from April 2018-19.
WGGB Acting General Secretary Ellie Peers said:
“The increase in Class 4 NICs has been justified as levelling the playing field between employees and freelances, who now receive the same level of State Pension. But this is missing the point. Our freelance members don’t receive benefits such as maternity pay, sick pay or holiday pay, as employees do. On top of that, freelance writers have no job security, carry economic risk, and pay costs that employees do not have to. They are also already working on very tight margins and these changes will risk lowering their standards of living further.”
Self-employed workers currently pay 9% Class 4 NICs on earnings between £8,060 and £42,355, and 2% above that. Self-employed Class 4 NICs are set to rise to 10% in 2018 and 11% in 2019.
Making Tax Digital delay
In another move, Hammond announced a delay in the 2017 Budget of one year on plans to introduce the controversial Making Tax Digital scheme, which will require freelances with incomes of more than £10,000 to keep an electronic record of all transactions and report to HMRC every quarter. The delay, which applies to all small traders below the £83,000 VAT threshold, may allow entertainment unions including WGGB, who have opposed these changes, to lobby for exemptions and simplify the system.
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