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March 15, 2017

National Insurance Update

The Chancellor of the Exchequer has announced that the proposed changes to class 4 National Insurance for self-employed individuals, declared in the 2017 Spring Budget, have now been dropped.

Changes Proposed in Spring Budget 2017

It was announced in the Spring Budget on 8th March 2017 that the main rate of Class 4 National Insurance (NI) would increase from 9% to 10% in April 2018, and then again to 11% in April 2019. This meant that by April 2019, it would have costed up to £730 more per year to be self-employed, although when combined with the cancellation of class 2 NI, the real cost would be around £590.


The government has now announced that they will not be going forward with the changes proposed above, and so class 4 NIC will instead remain at 9%. The policy reversal appears to have arisen due to strong opposition of the measure following its announcement in the budget. With the abolishment of class 2 NI from April 2017, self-employed individuals should instead be financially better off going forwards.

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