Chancellor defends decision to scrap reform of NI for the self-employed
Chancellor Philip Hammond has defended the decision to scrap a planned reform of National Insurance which would have given about three million self-employed workers an extra £130 a year.
Labour accused Mr Hammond of betraying the selfemployed when the Treasury revealed on Thursday that it would not be pressing ahead with plans to abolish Class 2 National Insurance contributions (NICS).
But Mr Hammond said that it had proved impossible to find a way to do it without imposing “huge” extra costs on 300,000 of the lowest-earning self-employed people. The move was initially due to take effect in April this year, but Mr Hammond delayed it by 12 months and has now cancelled the proposal altogether. Mr Hammond said: “We were very committed to removing the Class 2 National Insurance contribution and we spent a lot of time trying to find a way to do this which won’t disadvantage 300,000 very low-paid self-employed people.
“But there just isn’t a way to do it without introducing huge additional complexity into the tax system.”