Why don’t we still pay Class 2 NIC monthly?

Class 2 National Insurance Contributions (NICs) are paid by self-employed taxpayers and members of partnerships if their annual profits are over £6,025. Class 2 NICs are payable at a flat weekly rate currently, £2.85. Class 2 NICs count towards payments such as the state retirement pension, the employment and support allowance, maternity allowance and bereavement benefits. The withdrawal of Class 2 NICs was due to take place from April 2018 but has now been delayed until April 2019.

The collection of Class 2 NICs changed with effect from the 2015-16 tax year and is now made through the existing self-assessment system together with income tax and Class 4 NICs. A liability to Class 2 NIC should be reported on an individual’s self-assessment tax return and any payment of Class 2 NICs relating to 2016-17 will become due on 31 January 2018. The option to make a monthly payment is no longer generally available, however it is possible to set-up a Budget Payment Plan and continue making payments in instalments.

Planning note

A limited number of self-employed taxpayers don’t pay tax through self-assessment (such as a non-UK resident who’s self-employed in the UK). If this is the case, HMRC should contact you to make separate payment arrangements.

Posted in National Insurance

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Latest News

When you can’t claim employment allowance

The employment allowance of £3,000 per year is available to most businesses and charities and can be used to be …
Read More

Coventry named UK City of Culture for 2021

In a boost for the Midlands economy, Coventry has been named UK City of Culture 2021. The announcement was made …
Read More

Selling your business – 10% tax may apply to sale

Entrepreneurs’ relief applies to the sale of a business, shares in a trading company or an individual’s interest in a …
Read More

Twitter Feed