Around two million self-employed people will pay less in National Insurance contributions from 2018 after the chancellor abolished the Class 2 rate. The ‘top-up’ NI contribution is payable if profits are above £5965 a year, at a rate of £2.80 per week.
The chancellor declared he wanted to “light the fires of enterprise” as he also announced a reduction in basic Capital Gains Tax from 18% to 10%. The higher rate drops from 28% to 20% – but both cuts exclude any gain on residential property.
Personal tax allowances continue to rise. The lower threshold will be £11,000 from this coming April and £11,500 from next April when the 40% tax threshold will also rise from £42,385 to £45,000.
The increased 40% taxpayer cutoff will also affect the amount of BIK fleet drivers pay, with those currently earning between £42,385 and £45,000 seeing their BIK bills fall.
