Self Employed changes to Class 2 NI contribution collection

I have just been asked a question about the collection of class 2 national insurance contributions, if you are self employed, by one of my clients. This is great news and simplifies the position.
I do hope that this helps you.
For any business help and advice in Blackpool, do not hesitate to contact me at
As always thank you for reading,
Geoff Reeves

The latest rules recently announced have appeared on Gov.UK website:-
HMRC update starts here:

“The collection of Class 2 NICs will be through Self-Assessment (SA) so that the self-employed can pay their income tax and Class 2 and Class 4 NICs together through one process. This will start from the 2015-16 tax year onwards.

The existing six monthly bills and current direct debit payments will both cease during 2015. We will automatically cancel the customer’s DD following their last payment in July. The customer will not need to do anything.

A Budget Payment Plan (BPP) will be available to all SA customers providing they are up to date with their payments. The customer can set up a BPP at any time. A brief guide to the BPP is provided below.

You can set up a ‘budget payment plan’ to make regular payments in advance. The payment plan lets you:

• Decide how much to pay each week or month • Stop paying for up to 6 months

You can set up your plan using your HMRC online account – you must be up to date with your payments and pay by Direct Debit. If the total you’ve paid during the year doesn’t cover your bill in full, you’ll have to pay the difference by the payment deadlines.

The liability for Class 2 NICs will no longer be automatic. From 2015-16 onwards the self-employed will report their liability through their SA. Those that report a profit below a new Small Profits Threshold (SPT) will not be liable for Class 2 NICs, but they will be given the option to pay it voluntarily to protect their entitlement to contributory benefits. They will also be informed of the potential impact of choosing not to pay voluntary NIC. The SPT will be set equivalent to the Class 2 Small Earnings Exception (this is currently set at £5885).

This change to the way Class 2 NICs is collected will mean that the self-employed will no longer have to apply for a Self-employed Exception Certificate (SEE) from 2015-16 onwards. Those with low profits or profits below the SPT, who do not wish to pay Class 2 NICs, will not be liable automatically for Class 2 NICs and therefore will not have to seek exception.


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