National Insurance U-Turn - PwC's head of tax comments

Published at 15:22 PM on 15 March 2017

The Government today scrapped plans to increase National Insurance Rates for the self-employed by 1% to 11% in April 2019.  


Kevin Nicholson, head of tax at PwC, commented

"With tax rises, it's often not the level of increase but what it signifies that matters.   A seemingly small increase in class 4 NICs marked a sea change in tax policy, with the jump in the number of self-employed since 2008, making them a target group for a tax increase.

"This is a lesson in the perils of tweaking taxes and it may well go down as another pasty tax or granny tax.  Fundamental reform of the tax system for today's working world is undoubtedly needed, but reform requires proper consultation. It's a positive move that the Government is looking to do this by considering the tax treatment of different types of worker. 

"In conceding the NIC increase went against the manifesto commitment not to raise the three main taxes during this Parliament, the Chancellor has arguably tied his hands further.  The big question is where can the Government look now for the tax rises it may need in a post Brexit world?”

ENDS


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