United Kingdom treasury chief 's budget approach is cautious

Meanwhile, the think tank said the United Kingdom is set for "a third Parliament of austerity", after the government's Budget watchdog, the Office for Budget Responsibility (OBR), said the chancellor is unlikely to be able to eliminate the deficit in the next Parliament.

National Insurance rise of 2%. Prime Minister Theresa May and her predecessor have presided over seven years of austerity to close a budget deficit that ballooned during the financial crisis.

The Chancellor went on to say that these changes would raise £145 million a year for the Treasury by 2021/22 and would still mean that self-employed people earning less than £16,250 a year will see their national insurance contributions reduced.

In today's Spring budget, which would mark Philip Hammond's very first and last, with the move to only having an Autumn Budget from now on, there was a lot at stake for the self-employed, with many waiting to learn how what was announced would affect SME's in the UK.

Meanwhile, Hammond has faced a backlash after announcing a hike in taxes for self-employed people, breaking a key Conservative Party manifesto pledge.

Philip Hammond scrapped David Cameron's 2015 manifesto commitment as he revealed plans to raise an extra £2bn (€2.3bn) from entrepreneurs by the end of the parliament.

Earlier, Hammond, who became finance minister in 2016 shortly after Britons voted to leave the European Union, defended his decision as a first step in addressing an unfair difference in tax treatment between ordinary employees and the growing number of self-employed workers.

Wales Office minister Guto Bebb told BBC Radio Cymru: "I believe we should apologise".

Addressing a press conference on Thursday, Mrs May insisted that the policy was "fair", when considered in the light of the abolition of the separate class 2 payments as well as improvements to the benefits received by self-employed people.

"But this is a change that leaves lower-paid self-employed workers better off, it's accompanied by more rights and protections for self-employed workers and it reforms the system of National Insurance to make it simpler, to make it fairer and to make it more progressive".

She said: "It is focusing people down the employed route rather than self employment".

For many years, there was a direct link between the tax paid by a company on its profits, and the tax "allowance" given to individuals who receive dividends paid out of those profits.

In response to the Budget, Helen Dickinson OBE, chief executive of the British Retail Consortium, said: "We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily".

  • Zachary Reyes