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: Onvio

Forgot Password?

Latest News

If You Own A Small Business, Do You Need An Accountant?

You do not need an accountant for a small business, legally speaking – small business owners can take care of …
Read More

New guidance on sexual harassment and harassment at work

The Equality and Human Rights Commission (EHRC) has published new technical guidance on sexual harassment and harassment at work. It …
Read More

New taskforce to target waste criminals

A new taskforce has been launched to tackle serious and organised waste crime, such as dumping hazardous materials on private …
Read More