Yesterday it was announced by the Prime Minister the Class 4 NI increases for Self Employed (sole traders and partners, not company directors) announced in last weeks budget are not going ahead. They were originally proposed at 1% from April 18 and 1% from April 19.

In no way is this a concession from the Government to Self Employed; it’s a political decision around interpreting the tax lock promised in the 2015 Conservative Manifesto. The tax lock promised no rises in Income Tax, NI or Vat – it was argued by the Treasury this only applied to NI for employees, Class 1, but the argument has been lost. Pure politics.

The political assumptions used to justify the increase, that the Self Employed underpay Tax and NI compared to Employed haven’t gone away. As the “gig economy” grows, and company’s like Uber and Deliveroo come under scrutiny for employment practices, it’s a clear area for political interest and it’s likely that that the perception of the Self Employed not paying their “fair share” will continue. There may not be a lot of differentiation between those running business entities – people we historically classed as self employed – and the “new self employed” in the so called gig economy.

For people working through companies we have the new Public Sector IR35 rules tightening the tax take from April 2017 onwards, and expect some other reforms for Self Employed in the autumn budget 2017.

The whole area remains a heated one.