SMALL business owners are celebrating after the Government’s U-turn over a planned hike in National Insurance rates for the self-employed.

Chancellor Philip Hammond said yesterday he would not proceed with the planned two per cent increase in Class 4 National Insurance Contributions, only a week after the Budget.

Lisa Berry, who runs Dorcan based jewellery company Cheeky Little Prints said she was delighted with the news.

She said: “I think it’s absolutely fantastic. It’s great they have actually started to listen to self-employed people now.

"When you become self-employed you take such a risk because you are not guaranteed a monthly income in the beginning or holiday.

“Increases can put people like me off growing our businesses because we simply don’t have the funds to do so.

"I am delighted it hasn’t happened and the Government has finally seen sense”

Janet Garrett, owner of Janet’s Puppy Skool in Haydon Wick, said the news had come as a welcome surprise.

“When I was working in the public sector I was paying a far greater level of National Insurance so I thought this raise was rates catching up," he said.

“My one question and concern is, the money that was to be gained from raising National Insurance, where will that now come from?”

John Linstead, of Stratton-based J L Waste, said: “It is a massive relief. Small businesses struggle daily without having to deal with an increase in National Insurance rates.

"I knew there was talk of it being scrapped and I am so pleased it has gone. People like us work to build our businesses up and this would have damaged us.”

Class four NI contributions, those paid by the self-employed, would have risen from nine per cent to 10 per cent in April 2018 before rising again to 11 per cent in 2019.

The rise had provoked outrage from small business owners and politicians who accused Mr Hammond of reneging on promises made in the general election manifesto.

In a letter to Conservative MPs, Chancellor Philip Hammond said: “In light of what has emerged as a clear view among colleagues and a significant section of the public, I have decided not to proceed with the Class 4 NIC measures set out in the Budget”.

“It is very important both to me and to the Prime Minister that we are compliant not just with the letter, but also the spirit of the commitments that were made."

South Swindon MP Robert Buckland said: “The Government has listened to concerns raised about this issue and there will be a full review of the operation of National Insurance and the position of self-employed people.”

North Swindon MP Justin Tomlinson said: “Having fed back the views of some of my local constituents directly to the Chancellor, I am glad that he has listened.

"The Government has committed to look into the issue of access to the wider benefits for self-employed people, alongside looking into how we look to reflect more fairly the differences in entitlement in the contributions made by the self-employed.

"We are also keen to ensure that we remain committed to the promises made in our 2015 manifesto. I therefore support the position that there will be no more increases in NICs in this Parliament.”