Woodwards Accountancy & Taxation Services

Changes to Class 2 National Insurance Contributions

Changes have been made to the way Class 2 National Insurance Contributions are collected.

Until now, contributions have been collected either by direct debit, or by six monthly demands. However, if you are dealt with under Self Assessment and complete the Self-Employment or Partnership pages, with effect from the 12th April 2015 Class 2 NIC will be collected through Self Assessment.

One consequence of this is that there will no longer be the need to make the Small Earnings Exception Claim if you anticipate your earnings for the year being below £5,965. Class 2 NIC will only be collected if your earnings exceed that threshold. You will have the option to pay them voluntarily to protect your benefit entitlement.

Remember, Class 2 National Insurance Contributions count towards your State Pension and may allow you to claim certain other benefits РEmployment and Support Allowance, Maternity Allowance or Bereavement benefits.

So, if you are uncertain how this will affect you, give me a call to discuss your options.

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