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Home » Business News

Class 2 NICs U-turn another sign of Government’s failure to support self-employed….

Submitted by on September 17, 2018 – 6:30 am |


laptop writingAfter The Chancellor’s U-turn on plans to scrap Class 2 National Insurance Contribution yesterday, leading tax specialist for freelancers and contractors, Qdos Contractor, has said it is another indication that tax policy does not serve in the best interests of the UK’s 4.8m self-employed workers.

Class 2 NICs were originally due to be removed in April 2018 – a year later than planned. But the Government shelved these plans, before reversing its decision to scrap the tax entirely. Class 2 NICs are paid by self-employed people earning profits of £6,025 or more a year.

By removing Class 2 NICs, millions of self-employed workers were expected to save around £150 per year.

Qdos Contractor CEO, Seb Maley, commented:

“The Government has gone back on its word, choosing to reverse what would have been a very welcome tax break for millions of self-employed workers.

“After IR35 reform, the slashing of tax-free dividend allowance and now this U-turn, the Government seems intent on making things more difficult for independent workers financially – irrespective of whether they are sole-traders or limited company contractors.”

“With the Budget fast-approaching, we urge the Government to dispose of any planned tax changes that negatively impact the UK’s self-employed workforce. This includes the potential roll-out of IR35 reform in the private sector, which could result in hundreds of thousands of contractors paying up to 30% more tax without receiving any employment rights.

“The Government regularly voices its support for the self-employed, but action speaks louder than words. It’s time the tax system supported those brave enough to strike out alone and work without security.”

Previous Qdos Contractor research suggests:

●        91% of contractors believe the Government’s attitude to the self-employed threatens this way of working

●        63% want the Government to prioritise building a fairer tax system for the self-employed

●        95% think the Government is reducing the benefits of working independently

●        92% of contractors believe the Government views them as a soft target


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