Hammond U-turn On Rise in NICs For Entrepreneurs – Was it HHH What Persuaded Him?

Last week, we called out Chancellor Philip Hammond on his budget proposal to hike National Insurance contributions for the self-employed. You won’t believe the response.

We argued that the rise, which would have seen 2.5 million freelancers pay up to £240 pounds per annum in extra taxes, broke a Tory manifesto pledge to freeze taxes.

And it looks like we were right to do so.

Yesterday, Hammond performed the ultimate volte-face, writing to every Tory MP to explain why he was about to perform an unprecedented U-Turn.

“I am writing to clarify the Government’s position with regard to the changes to National Insurance Contributions (NICs) for the self-employed, announced in last week’s budget.”

He began.

“The gap between benefits available to the self-employed and those in employment has closed significantly over the last few years”,

He continued, referencing the introduction of the new state pension in 2016, which provides an additional £1,800 to the self-employed for each year of their retirement.

He goes on to discuss the increase in numbers of self-employed workers in Britain, which, he says, will cost the public finances “£5bn this year alone”, and £6bn by the end of parliament.

He argues that this “represents a significant risk to the funding of our public services.”

But wait – what’s this?

“However difficult the fiscal challenges we face, the tax-lock and spending ring fence commitments we made for this Parliament should be honoured in full.”

He declares.

“It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit, of the commitments that were made.”


“I have decided not to proceed with the Class 4 NIC measures set out in the Budget.”


It seems that in the face of the backlash from the very entrepreneurs – company founders, accountants, freelance legal eagles – people like you and me, HHH’ers – he sought to hit hard in the pocket, Hammond has decided to back down.

He will still be abolishing Class 2 NIC’s from 2018, but now he will be seeking to find an extra £145m per year from a source other than “bootstrapping” entrepreneurs and service providers.

“We now intend to widen this exercise to look at other areas of difference in treatment, alongside the Government’s consideration of the forthcoming report by Matthew Taylor, CEO of the RSA, on the implication of different ways of working for employment rights.”

He finishes.

We’re not saying it was HHH that clinched it for the devs and ents, by virtue of our well timed and coruscating critique of Hammond’s proposal, but it just goes to show how a connected, colourful community like ours has become a focal point from which to defend itself from the taxman.

With your support, we’ll always make sure we are fighting your corner, and defending you from a government that seems determined to push the startup community to the brink of collapse.

The startup community made the government think again, and they’ll twice before trying to pull another stunt like that!

Big up yourselves, HHH’ers – and keep reading – digital disruption never felt so good!

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