National Insurance U turn: Philip Hammond cancels National Insurance increase

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Employees Posted on March 23, 2017

One of the significant announcements Chancellor Philip Hammond made on Budget Day was the proposed increases to the main rate of Class 4 National Insurance Contributions (NICs) paid by self-employed individuals. The rate was to increase from 9% to 10% from April 2018 with a further increase planned from 10% to 11% from April 2019.

The Chancellor has announced that the government will not now proceed with the proposed increase in Class 4 NIC rates. Self-employed individuals currently pay Class 2 and Class 4 NICs. Class 2 NICs are to be abolished from April 2018.


In a letter to Tory MPs, Hammond says, ‘It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit of the commitments that were made.

‘In the light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measure set out in the Budget.’

The government propose to make further announcements following the forthcoming report by Matthew Taylor on the implication of different ways of working for employment rights.

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