Great news for Logic4training customers! It was announced yesterday that the government will NOT be going ahead with plans to increase National Insurance for the self-employed.
In his Spring Budget last week, Chancellor Phillip Hammond announced unexpected tax hikes for self- employed people, which would have seen sole traders with annual earning of £43,000 paying an extra £350 in Class 4 NICs in the 2018/19 tax year, rising to an increase of £700 in NI Contributions in 2019/20.
Hammond and PM Teresa May had faced huge criticism and pressure from Labour MPs, members of the public and even fellow Tory MPs for going against a 2015 manifesto pledge to freeze national insurance.
Hammond explained in a letter: “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.”
In Other Budget News…
- New T-levels – £500 million to develop new ‘T Levels’ in 15 vocational categories including engineering and construction, which will boost the UK’s productivity and tackle the skills gap. More on this exciting news in a future blog post!
- Tax allowances – As planned, personal tax free allowance will rise to £11,500 from April, increasing to £12,500 by 2020.
- Tax returns – Small businesses will get an extra year to prepare for tax digitisation and quarterly reporting
- Business rates – Business rates are being revaluated from 1 April 2017 (read our blog about it here). In the budget, the Chancellor set aside £435 million to help firms affected by the increases, with some pubs getting a one-year discount. Businesses losing existing relief will be subject to a £50 per month cap on rate rises.
- Fuel duty – Good news for van drivers – fuel duty frozen for a further year!
- Beer duty – No further increases, as previously announced duty will rise in line with inflation, equating to 2p per pint of beer or 1p per pint of cider.
- Childcare – The government are launching a new tax-free childcare system, providing up to £2,000 per year for each child to help with childcare costs. For every 80p parents put into the scheme the government will add 20p, giving the self-employed childcare tax break opportunities for the first time. Free childcare will also double to 30 hours a week from September.
The missing bits…
Unfortunately, mentions of the housing issues were few and far between. The energy sector was also largely ignored, apart from plans to help the oil and gas industry maximise exploitation of remaining North Sea reserves, and the news that rooftop solar schemes will be subject to tax hikes, a blow for the already vulnerable industry.