Changes to Class 2 National Insurance Collections
In previous blogs I have discussed Class 2 NI contributions and how they are collected. The National Insurance Contributions Bill was published on 18 July 2014. It will introduce legislation (which was consulted on last year) to reform the collection of Class 2 NICs by enabling the self-employed to pay their Class 2 contributions through self-assessment alongside their income tax and Class 4 NICs.
Liability for Class 2 NICs will arise at the end of each tax year and will be collected through self-assessment from April 2016 for the 2015/16 tax year onwards. This will replace the current method of collection of Class 2 NICs via direct debits or quarterly demands.
Taxpayers will also be able to make voluntary payments of Class 2 if their profits are below a certain threshold to retain their entitlement to certain state benefits.\n\nIf you would like to discuss this further, please contact me.