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

Client Portal Login

Forgot Password?

Latest News

How the £1,000 trading allowance works

There is a £1,000 tax allowances for miscellaneous trading income that has been available to taxpayers since April 2017. This …
Read More

When is lettings relief available?

In general, there is no Capital Gains Tax (CGT) on a property which has been used as the main family …
Read More

Qualifying for VAT special schemes

There are three main special VAT schemes available to small businesses. These are the flat rate scheme, the annual accounting …
Read More