Mar 9, 2017
Reality Check: Do 60% benefit from the NI changes?
The claim: 60% of self-employed people will pay less National Insurance as a result of these changes. Reality Check verdict: 60% of people according to Treasury estimates will pay less, but only if you combine the abolition of Class 2 National Insurance contributions, which was announced in 2016, with the increase in Class 4 contributions announced on Wednesday. What changed on Wednesday was that in April 2018, Class 4 National Insurance contributions will rise from 9% of profits earned between £8,060 and £43,000 a year, to 10%. The following year it will rise again to 11%. National Insurance of 2% will still be payable on earnings above £43,000. George Osborne announced the previous year that Class 2 National Insurance contributions, which are paid at a flat rate of £2.80 a week by self-employed people earning profits of more than £5,965 a year, would be abolished from April 2018. If you look at the two changes together, the Treasury says that 2.6 million people will be better off by an average of £115 a year, while 1.6 million people will lose out by an average of £240 a year.
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