Remember Philip Hammond’s abortive attempt to increase national insurance for the self-employed?
He actually had quite a good case as the benefits being paid to the self-employed increased very substantially in 2016. That NIC rise was scotched by a Conservative backbench rebellion and the embarrassing fact that the NIC rise had been specifically ruled out in the conservative manifesto of 2015.
Move forward a few years and the Conservative manifesto in 2019 also ruled out increases in national insurance. However, at that point, there was no consideration of the self-employed receiving the substantial amount of support that they are through the Covid-19 crisis.
When Rishi Sunak announced this support for the self-employed, he made it clear that their preferential treatment for National Insurance as compared to the employed was no longer justified. One can therefore expect an increase in the Class 4 NIC amount towards 12%, aligning it with employees.
This is one example where Covid-19 will change the fiscal rules of the game, but these National Insurance changes will not be the last.