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.
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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.
