NICs U-turn fallout extends beyond UK tax debate

The UK government’s decision to abandon a proposal to increase national insurance contributions for the self-employed raised questions about its competence at a critical time in the Brexit process, as well as its ability to increase taxes, commentators suggested. The government announced on March 20 that it will invoke article 50 of the Lisbon Treaty on March 29 to begin the formal process of leaving the European Union.

The “political mauling” of chancellor Philip Hammond raised fears in the City of London, where he is regarded as one of the most important advocates for business, and fuelled Tory divisions over Europe, Financial Times financial editor Patrick Jenkins wrote …

Even by the standards of recent budget U-turns, the one performed on March 15 “takes some beating,” said a Guardian editorial …

The U-turn underlines the need for a rethinking of the way budgets are made in the UK, said Jill Rutter, program director at the Institute for Government. “The chancellor has fallen victim to the failure to prepare the ground for reform, too much secrecy, and the cavalier treatment of tax policy in the last Conservative manifesto,” she said. Read more:

My news story for Tax Analysts, 21 March (paywall)