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Do you know about the changes to Class 2 National Insurance (NICs)?

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The change simplifies the process of paying Class 2 NICs by enabling self-employed and small businesses to pay via their self-assessment (SA), which will reduce the admin of two separate collections.

When does the change come into effect?

  • April 2016 for the tax year 2015/16 onwards

What will happen in the interim?

  • The current six monthly direct debit billing system will continue until April 2015.
  • After April 2015 liability to pay Class 2 NICs will be at the end of each year and legislation will be introduced in the NICs Bill 2014 to reflect this.

What if I have no profits chargeable to tax or my profits are below the profits threshold?

  • You will no longer be required to apply in advance for an exception from paying Class 2 NICs. Instead you have the option to pay Class 2 NICs voluntary at the end of the year as liability will not automatically occur.

How have they calculated the amount due?

  • They will calculate based on the number of weeks you have been self-employed in the year, this will then be determined when you complete your SA return, and will be paid together with your Income Tax and Class 4 NICs.

If you would like to know more about how this change may affect you email or call 0161 832 4451.