As you may have seen from my previous posts, I registered as self-employed at the beginning of this calendar year. As part of this, I registered for Class 2 NICs. All the information I can find online says that I'll receive a request for payment in April - can anyone tell me how I'll receive this? Will I be charged for contributions from Jan-April 2015 only, or in advance as well?
Class 2 NI is usually collected monthly by dd and is the main reason HMRC insist that the self employed register as soon as possible. They will normally send you details on how to pay and a direct debit form. Deferment is possible if your profits are low (around £5k?) but of course paying class 2 does go towards your state pension contributions so not always a good idea to avoid paying (also not a good idea to earn less than £5k!). I would think you will be expected to pay from January and then monthly.
Mr Osbourn did mention something about scrapping class 2 if re-elected in May, not sure what happens about state pension contributions in that case though. It's only the price of a coffee at Starbucks so no great savings to the self employed but it would scrap another 'messy' tax.
Hi
Yes they used to send a payment request every April and October - you will receive this is a letter form with the contribution breakdown, period covered and date due. They usually charge in arrears, up to April - payable July. (But I understand from 6 April 2016 payments will be added to Self Assessment bills).
There is a small earning exemption you can apply for it your profits are under a certain figure, currently £5,885.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hopefully I'll receive something in the post soon then - want to know they've got me in the system! They must have though, as I have a UTR.
Yes, I'd read about the £5,885 small earnings exemption but hope to earn more than that and as Rob says, it goes towards my state pension in any case. Useful that it exists though.
Operative date The measure will have effect from April 2015. Class 2 NICs will be collected through SA from April 2016, for the 2015-16 tax year onwards. The current six monthly billing system will cease from April 2015.
Thanks Stardoe and Joanne - I'd read something about that too but found it a bit unclear, as you say.
Haven't received anything about NI yet, just the deadline for my tax return in Jan next year.
My take on that is any NI due from April 2015 will be calculated when you submit your SA after April next year. In Barboleta's case that should mean she will get a bill from Jan to 5th April, then pay her 2015-16 contributions alongside with her self assessment tax, which will be due January 2017.
Although I agree with Rob about it being a messy tax my first thought was that's going to mean a loss of income for the Government due to the year lag for NI between April and September 2015. Apparently though the Government estimates it will save £74m over 5 years so it's actually a good thing.
Thanks John :) Haven't received a bill yet. I definitely registered for Class 2 NICs when I registered as self-employed, but am a bit worried that I haven't had anything yet and am not sure when the payment deadline is. It's still April though, so I guess there's still time!
Just updating to say I received my NI bill in the post today, along with a note called "Changes to the way you pay your Class 2 National Insurance contributions" which confirms what you lovely people said above :)
Thanks again for your help!
-- Edited by Borboleta on Tuesday 28th of April 2015 01:54:18 PM
