The BBC reports Robert Jenrick, exchequer secretary to the Treasury, revealed in a written ministerial statement that the government will not now proceed with a planned abolition of Class 2 National Insurance contributions (NICs) during this parliament.

Elaborating on government’s reasons, the statement pointed to concerns raised by low-earning self-employed people who would have to pay more to access the state pension, as well as fears the move would make the tax system more complex.

Government had planned to scrap Class 2 NICs, paid by self-employed people with profits of £6,205 or more a year, in April 2018 but in November 2017 announced it was delaying the move for a year.

Dave Chaplin, CEO and founder of contracting portal ContractorCalculator rounded on the government’s move: “The government is claiming that it introduces an unintended consequence that it cannot resolve without introducing more complexity into the tax system. How can they say that with a straight face? They have damaged the self-employed workforce in the public sector with the off-payroll tax, which has had significant unintended consequences and introduced massive tax complexity. Yet they are planning to roll the same ill-thought out tax to the private sector.”

Meanwhile Julia Kermode, CEO of trade association The Freelancer & Contractor Services Association, called the move “very disappointing” and another blow for self-employed people on low incomes.

Kermode accused Chancellor Phillip Hammond of once again penalising hard-working self-employed workers who she described as the backbone of the UK economy. “The government is justifying its move through concern for those self-employed people who voluntarily pay Class 2 NICs to gain access to a state pension,” she added.

“However, the move reiterates that the UK tax and NIC system is complex, clunky and outdated. Making changes to one part of the system inevitably has unintended consequences on another part of the system.

“We have seen this happen time and time again in the numerous tax policy changes that we have seen affecting self-employed people in recent years, and until a government commits to taking a holistic approach rather than knee-jerk reactions to act as sticking plasters on a broken system, this will continue to happen.

“The government says it has listened to some stakeholders in this instance, perhaps it will also now listen to the huge number of stakeholders expressing their many concerns about the possible IR35 changes it is planning on imposing on the private sector.”

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