The Government has decided to delay its planned increase in national insurance contributions for the self-employed in a move welcomed by campaigners.
Class 2 NICs were set to be abolished from next April, but the Government will now postpone the move for a year.
The delay comes as campaigners had expressed concerns over the impact of the change on the state pensions of the low-paid self-employed, particularly women.
For those earning below £6,025, they do not automatically pay the £2.85 a week class 2 rate, but pay optional class 2 NICs to gain state pension entitlement.
However, they will have to pay the more expensive class 3 contributions as things stand.
Has the NICs U-turn killed off auto-enrolment for the self-employedMore than 900,000 people earned below the £6,025 threshold, Government statistics fro 2015/16 show.
The Low Incomes Tax Reform Group of the Chartered Institute of Taxation told The Guardian: “This is a welcome announcement that shows the Government is listening.”