The Federation of Small Businesses has warned chancellor Philip Hammond not to revisit plans to hike NICs for contractors, as the climate is currently too 'unforgiving'.

Theresa May was forced to abandon the intended two per cent rise in March after a backlash from the self-employed and other concerned parties.

The FSB highlighted that contractors “who don’t have the luxuries of sick or holiday pay” and so are forced to be real “strivers,” would be deterred if the plan to raise self-employed NICs was brought back.

“The last thing they [the self-employed] need is increased cost. Clearly this is not the time to revisit [those] failed plans…it would act as a disincentive to business creation.”

IPSE's confidence index told a similar story, and revealed that freelancers were increasingly concerned over issues such as rising operating costs and an increased tax burden.

“IPSE’s Confidence Index shows that freelancers have been getting more and more concerned by rising input costs over the last 12 months” added IPSE’s economic policy adviser Lorence Nye.

However, he advised “not [to] panic just yet”. Indicating that the Bank of England expected inflation to reach around the current level, albeit just not yet.

“The increase has just come more quickly than they anticipated,” Nye said, referring to the bank’s end-of-year expectation.

“They’ve therefore said they won’t try to combat the inflation increase: both because the current level isn’t far off their target and because increasing interest rates at this point could actually do more damage to the economy.”

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