Higher National Insurance contributions announced in today’s Budget will hit farmers, self-employed farm workers and contractors, leading rural insurer, NFU Mutual has warned.
“The Chancellor announced that Class 4 National Insurance payments will rise by 1% to 10% next year and a further 1% in 2019,” said Sean McCann, Chartered Financial Planner at leading rural insurer, NFU Mutual.
“This move could signify that over coming years the Treasury will bring self-employed people’s National Insurance contributions up to the level of those paid by employees – currently 12% for basic rate taxpayers.
“This will add a further financial burden to the thousands of farmers, contractors and rural service providers who have self-employed status.”
He added that the announcement of smoothing for the introduction of new business rates would be welcome news for farm diversification enterprises.
“It’s also a huge relief to country people that the Chancellor did not impose penalties on diesel vehicle users aimed at reducing pollution in urban areas which we had feared could hit farmers and rural businesses hard.
“There was also welcome news for small businesses that the Government’s planned introduction of statutory quarterly tax returns will be delayed for a year, easing their administration costs.
“We’re now studying the detail of the Treasury’s detailed notes on the Budget as we often find these contain hidden measures which can affect businesses and personal finances alike. For that reason it’s worth looking at our Budget analysis on NFU Mutual ‘s website – nfumutual.co.uk - over the coming days to understand the full implications of the Budget.”
Meanwhile, NFU President Meurig Raymond said there were few measures in today’s Budget to help create an environment that supports profitable, progressive and competitive farm businesses.
He added: “The Chancellor’s announcement on capping business rates increases will be welcome news to members with small diversified farming businesses.
“However, the rise in National Insurance Contributions for the self-employed by 1% next year and a further 1% the year after will have a detrimental impact for farmers. The NFU is striving to make Government aware of the implications this will have on the sector.
“We are still very concerned about Government proposals on Making Tax Digital. While we welcome the announcement that it will be delayed until April 2019 for businesses under the VAT threshold, many of our members will still be impacted with a costly and burdensome process of accounting from April next year.
“Many farmers will feel that this Budget was a missed opportunity, particularly that the Chancellor did not see fit to extend capital allowances as part of the Government’s productivity plans. Farming needs to invest to increase productivity so it can compete post-Brexit,” he added.
“Farming produces the raw ingredients for the UK’s largest manufacturing sector – food and drink – which employs nearly four million people and contributes £108 billion to the economy. For every £1 invested in farming, it contributes £7.40 back to the country’s economy; it’s time for the Chancellor and Government to fully recognise British farming’s value for money.”