Chancellor George Osborne has announced that the government will abolish Class 2 NICs in the next Parliament and will reform Class 4 NICs to introduce a new contributory benefit test, amid concerns that this move could potentially impact future benefits payments to the self-employed and others
The announcement came in today’s Budget speech, but is subject to a Conservative or coalition government being in place after the general election.
The government has said it will consult on the detail and timing of these reforms later in 2015.
Dawn Register, partner, tax dispute resolution, BDO said: ‘The five million self-employed people who cheered at the announced abolition of Class 2 NICse should consider halting celebrations.
‘Proposed changes to National Insurance will be subject to a consultation process at the end of 2015 and there was only a commitment to make changes in the next five years. It will bring a saving of £2.75 a week, so an extra cappuccino on George Osborne, is better than nothing. However the main benefit will be the easier administration for many self-employed people with modest income.’
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