Changes to the way Class 2 NICs are collected
Class 2 National Insurance Contributions (NICs) are paid by all self-employed taxpayers unless they qualify for the small earnings exemption or other exemptions which remove the necessity to pay NICs.
From April 2015, the way Class 2 NICs are collected is changing. Currently, payments for Class 2 NICs become due six-monthly or can be paid monthly or quarterly by direct debit. All of these payment options will cease in July 2015 when the last payments relating to 2014/15 will become due.
Going forward, the collection of Class 2 NICs for 2015/16 will be aligned with Self Assessment Income Tax and Class 4 NICs. The aim of this change is to simplify the collection of Class 2 NICs. The first payment relating to 2015/16 will become due on 31 January 2017.
The structure of Class 2 NICs will also change so that only those with profits above a profits threshold will be liable. The self-employed without profits or with profits below the threshold will be able to pay Class 2 NICs voluntarily.