1. Home
  2. Tax News
  3. Spring Budget 2017 – Increase in Class 4 NIC

Spring Budget 2017 – Increase in Class 4 NIC

For 2016/17 self-employed individuals pay Class 4 NICs on profits between £8,060 and £43,000 at a rate of 9% and 2% on any profits in excess of £43,000. The maximum payable at 9% being £3,144.60 for the year.

For the tax year 2017/18 Class 4 NICs will remain at 9% for profits between £8,164 and £45,000. The maximum payable at 9% being £3,315.24 for the year.

From 6 April 2018 Class 4 NIC will increase by 1% to 10% and from 6 April 2019 it will increase by a further 1% to 11% from 6 April 2019.

As previously announced Class 2 NIC will be abolished.

The increase in Class 4 NICs will affect approximately 2.5 million self-employed individuals who will see their annual NICs increase by approximately £240 per year from April 2018.

 

 

  • admin

    Further to last week’s Budget where it was announced that there would be a rise in Class 4 NIC, the government have subsequently decided not to proceed with the changes.

    Class 4 NIC was originally due to increase from 9% to 10% as from 6 April 2018 and then rise to 11% as from 6 April 2019. However, the government has bowed to pressure from the public as well as its own backbenchers overs concerns it was breaking one of its Manifesto pledges not to raise income tax and national insurance rates during the course of this Parliament.

    There is however acknowledgement that changes to the tax system are needed to better reflect current working practices. The government are currently awaiting the results of Matthew Taylor’s review into self-employment working practices before deciding how to proceed.

  • Costas Pavlou

    Further to last week’s Budget where it was announced that there would be a rise in Class 4 NIC, the government have subsequently decided not to proceed with the changes.

    Class 4 NIC was originally due to increase from 9% to 10% as from 6 April 2018 and then rise to 11% as from 6 April 2019. However, the government has bowed to pressure from the public as well as its own backbenchers overs concerns it was breaking one of its Manifesto pledges not to raise income tax and national insurance rates during the course of this Parliament.

    There is however acknowledgement that changes to the tax system are needed to better reflect current working practices. The government are currently awaiting the results of Matthew Taylor’s review into self-employment working practices before deciding how to proceed.