The chancellor has announced a U-turn on his proposed rise in National Insurance rates for the self employed.
At the Spring Budget it was announced that from 6 April 2018 Class 4 NICs would increase to 10%, with a further increase to 11% the following year.
The government had previously pledged a triple lock on income tax, NICs and VAT in its manifesto. Unfortunately for the self employed, that measure, which was enacted in Finance Act 2015 and secondary legislation only applies to Class 1 NICs and not Class 4: a distinction not noted or understood by anyone outside of the world of tax.
In response to the backlash from the press and his own party the Chancellor has now announced in a letter to Conservative MPs that "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."
A statement to the Commons will be made later today.
Our guide: Spring Budget 2017: at a glance
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