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Call for comprehensive review of National Insurance

On 6 September 2018, Chancellor Phillip Hammond announced the plan to cut Class 2 National Insurance Contributions (NICs) had been scrapped. What initially appeared to be a simple change, had unintended consequences for some self employed individuals, with the Treasury finding that approximately 300,000 people with profits less than £6,000 per year would have to pay up to 5 times more in Class 3 NICs than they do now.

After a long consultation the government were unable to find a solution to resolve this issue and decided not to push ahead with the change, and it has been reported that there are no plan to reintroduce the cut in another form.

All of the uncertainty around NICs has prompted calls from campaigners for there to be a comprehensive review of all NICs. Anne Fairpro, Chair of the Low Incomes Tax Reform Group (LITRG) said:

“There are also wider changes that NI needs to adapt to. Given the significant changes in people’s working patterns including the increase in zero-hour contracts, holding more than one employment at a time or being employed and self-employed at the same time, we would like to see the whole system of national insurance reconsidered rather than tinkering and piecemeal changes. This is especially important given the ever-increasing numbers of self-employed workers.”

For further information on National Insurance Contributions, please contact Alan Rolfe on 023 8046 1200.

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