Class II National Insurance contributions
https://www.bbc.co.uk/news/uk-45439542
This breaking news story is being updated and more details will be published shortly. Please go to the link, above, for the fullest version.
update:
A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government.
It said Class II National Insurance contributions would not now be abolished in this Parliament.
It cited concerns that low-earning self employed people would end up paying more to access the state pension and it would make the tax system more complex.
The Federation of Small Businesses said it was "extremely disappointing" and would hit more than 3m people.
The government was originally due to scrap Class II 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 - something the FSB says will "net the Treasury more than £350m annually in the three years to 2021".
In a written statement, it said the change had been intended to simplify the tax system for the self-employed but it had "become clear" that a "significant number" of self-employed people with the lowest profits would have ended up paying more.
"Having listened to those likely to be affected by this change, we have concluded that it would not be right to proceed during this Parliament, given the negative impacts it could have on some of the lowest earning in our society," it said.
"The government remains committed to simplifying the tax system for the self-employed and will keep this issue under review in the context of the wider tax system and the sustainability of the public finances."
But Mike Cherry, chairman of the FSB, said: "The self-employed community has been let down today, missing out on a promise to reduce their tax burden.
"This raises serious questions once again about the government's commitment to supporting the self-employed. "
He added: "Class II NICs is a regressive levy that indiscriminately hits sole traders and makes life even tougher for those who are hard-up.
"Once you've reached a minimal income, there's no tapering or means testing in place at all.
"As things stand, you can be earning below the living wage and still paying two sets of NICs as a self-employed person.
"All the while you're wrestling with a universal credit system that's trying to strong-arm you into full-time employment.
"Rather than hitting more than three million self-employed people with this levy, the Treasury should have worked harder to develop more effective ways to protect around 300,000 low-earners and maintain their contributions for the state pension."
This breaking news story is being updated and more details will be published shortly. Please refresh the page for the fullest version.
https://www.bbc.co.uk/news/uk-45439542
This breaking news story is being updated and more details will be published shortly. Please go to the link, above, for the fullest version.
update:
A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government.
It said Class II National Insurance contributions would not now be abolished in this Parliament.
It cited concerns that low-earning self employed people would end up paying more to access the state pension and it would make the tax system more complex.
The Federation of Small Businesses said it was "extremely disappointing" and would hit more than 3m people.
The government was originally due to scrap Class II 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 - something the FSB says will "net the Treasury more than £350m annually in the three years to 2021".
In a written statement, it said the change had been intended to simplify the tax system for the self-employed but it had "become clear" that a "significant number" of self-employed people with the lowest profits would have ended up paying more.
"Having listened to those likely to be affected by this change, we have concluded that it would not be right to proceed during this Parliament, given the negative impacts it could have on some of the lowest earning in our society," it said.
"The government remains committed to simplifying the tax system for the self-employed and will keep this issue under review in the context of the wider tax system and the sustainability of the public finances."
But Mike Cherry, chairman of the FSB, said: "The self-employed community has been let down today, missing out on a promise to reduce their tax burden.
"This raises serious questions once again about the government's commitment to supporting the self-employed. "
He added: "Class II NICs is a regressive levy that indiscriminately hits sole traders and makes life even tougher for those who are hard-up.
"Once you've reached a minimal income, there's no tapering or means testing in place at all.
"As things stand, you can be earning below the living wage and still paying two sets of NICs as a self-employed person.
"All the while you're wrestling with a universal credit system that's trying to strong-arm you into full-time employment.
"Rather than hitting more than three million self-employed people with this levy, the Treasury should have worked harder to develop more effective ways to protect around 300,000 low-earners and maintain their contributions for the state pension."
This breaking news story is being updated and more details will be published shortly. Please refresh the page for the fullest version.
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