The self-employed face paying more national insurance after Chancellor Philip Hammond announced a hike in today's Budget.

Rates on so-called 'class 4' national insurance payable by the self-employed will rise from 9% currently on earnings between 8,060 and 43,000 to 10% from April 2018; and go up again by a further one percentage point to 11% in April 2019.

There's no NI to pay below the lower threshold, with the 2% rate above the higher threshold to stay.

Hammond said the move which will hit the estimated one in seven workers who are self-employed will close the gap between the amount of NI paid by this group and those employed as staff by a company, who pay more.

Calculations by wealth manager Hargreaves Lansdown suggest a self-employed worker earning 30,000 a year will pay 282 more national insurance in 2019 than in 2016.

However, the Chancellor stressed all self-employed people earning less than 16,250 would still see a reduction in their total NI bill.

The calculations are the result of a mix of this hike and a previously announced cut to NI rates.

Class 2 NI abolished

In his Autumn Statement last November, Hammond said he would scrap so-called class 2 NI payments 2.80 a week on earnings above 5,965 from April 2018.

While that looks like a 130-a-year saving, for many, the rise over the next two years in class 4 payments will more than wipe out this benefit.

Workers make national insurance payments to qualify for benefits such as the state pension.

Martin Lewis
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