Home Business NewsBusiness IFS backs Hammond’s National Insurance hike

IFS backs Hammond’s National Insurance hike

by LLB Reporter
9th Mar 17 1:50 pm

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The Institute for Fiscal Studies (IFS) has said Hammond has made the right decision increasing National Insurance contributions by the self employed.

The new changes will mean that the self-employed will have to pay an average of £240 a year, this is more than what it was previously. Any of those earning £16,250 or less will pay less.

This change to the self-employed taxation is seen as breaking a Conservative election promise. Former Prime Minister David Cameron said there would be “no change” to National Insurance contributions.

The IFS spoke of how the old system wasn’t good for the labour market, it said it created complexity and that is was unfair.

It said the two per cent increase in National Insurance for the self employed has managed to close a small part of the gap between employees and the self employed.

The IFS has spoken of it not being sensible to pledge no changes to tax: “As we said at the time these were silly pledges. To commit yourself to not raising the three main taxes – income tax, NI and VAT – ties your hands to an absurd extent. No party should repeat these sorts of promises.”

 

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