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Tax cut for self-employed workers scrapped

Tax cut for self-employed workers scrapped

UK:A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government.

It was originally due to scrap Class 2 National Insurance contributions in April but the move had been delayed by a year and has now been shelved.

It cited concerns that low-earning self-employed people would pay more to access the state pension, and it would make the tax system more complex.

Labour’s John McDonnell called it a “betrayal of the self-employed”.

The government was originally due to scrap Class 2 NI contributions, paid by self-employed people with profits of £6,205 or more a year, in April 2018 but last year announced it was delaying that for a year.

But it announced on Thursday that they would not now be abolished in this Parliament.

The move was set to save millions of workers about £150 a year.

But there had been concerns that the move would hit more than 300,000 self-employed people earning less than £6,000 a year who were paying the Class 2 NICs voluntarily, in order to access the state pension.

They would have faced being moved to Class 3 contributions, raising weekly payments from £2.95 to £14.65.