rises in national insurance contributions nics for self-employed workers have been criticised as penalising entrepreneurs.  chancellor philip hammond announced in the budget that the rate for class 4 nics would rise from 9% to 10% in april 2018, and to 11% in 2019.  that compares to 12% currently paid by employees.  the difference in national insurance contributions is no longer justified, mr hammond said.  self-employed people have traditionally paid lower nics than employees, as they receive fewer state benefits.  but the chancellor said the self-employed now had equal access to the new state pension. he also said that the government would consult on parental benefits, some of which self-employed people cannot claim.  the chancellor said all self-employed people who earned less than £16,250 would be better off.  around half of the 4.8 million workers registered as self-employed earn less than £13,000, according to the think tank the resolution foundation.  as a result it said most such workers - such as low-paid hairdressers - will be better off by 2019/20. line winners and losers hairdresserimage copyrightgetty images      a self-employed hairdresser - with average earnings of £12,700 - will be £70 better off       a self-employed taxi driver - with average earnings of £17,300 - will be £20 worse off      a self-employed management consultant - with average earnings of £51,100 - will be £620 worse off.  source: resolution foundation line  but the rise, which will cost those affected an average of 60p a week, was criticised by entrepreneurs.  increasing national insurance rates for the self-employed could be a further step by the government to penalise those who are taking risks and starting a business, said lucy-rose walker, the chief executive of entrepreneurial spark.  others said it was unfair that the self-employed would have to pay more, when they do not receive the same level of state benefits.  self-employees are subject to a lower national insurance contribution because they do not receive the same entitlements and benefits as their employed counterparts - such as holiday and sick leave, said chas roy-chowdhury, head of tax at the association of chartered certified accountants. budget banner      reality check: do national insurance changes break pledge?     live: reaction to the budget statement     at-a-glance summary     what it means for you     more stories on spring budget 2017     the chancellor's speech in full  budget banner bottom  those paid less than £16,250 will be better off because of a planned abolition of a different class of nics - class 2 - in april 2018.  under class 2 nics, self-employed workers pay 2% on qualifying earnings between £5,965 and £8060, amounting to £2.80 a week.  the increase in the nics rate will raise £145m a year for the treasury by 2021-22.  matthew taylor, head of the royal society of arts, is due to produce a report on how the self-employed are taxed later this year.  he has already said that the treasury is missing out on millions of pounds, as a result of the workers who have been designated as self-employed.
budget 2017: national insurance rate rise criticised