NIM70001 - Class 2 National Insurance contributions: general information: introduction

Section 11 of the Social Security Contributions and Benefits Act (SSCBA) 1992Ìýand Section 11 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992

From 6 April 2015 to 5 April 2022

Every self-employed earner (see NIM70100) who:

  • has reached age 16, and
  • has not reached State Pension age, and
  • satisfies the prescribed conditions of residence or presence in the United Kingdom (see NIM70050)

is required to pay Class 2 National Insurance contributions (NICs)Ìýwhere the earner has relevant profits equalÌýtoÌýor above the Small Profits Threshold (SPT section 11(2) SSCBA 1992) 바카라 사이트“ see NIM70150.Ìý For those self-employed earners withÌýrelevant profits below the SPTÌýor who have no relevant profits, such earners will be eligible to pay voluntary Class 2 NICs (section 11(6) SSCBA 1992) 바카라 사이트“ see NIM70300.

From the 2015 to 2016 tax year, for most self-employed earners, Class 2 NICs will be assessed, calculated and payable annually through the Self Assessment system.Ìý However, there will be exceptions to this 바카라 사이트“ see NIM70550Ìý(Regulation 43 of the Social Security (Contributions) Regulations 2001).

NIM72000 explains how Class 2 NICs can be paid.

Any Class 2 NICs due for tax years from 6 April 2015 which are collected through the Self Assessment system and are late paid:

  • will be subject to late payment interest and penalties,
  • and late payment may adversely affect entitlement to contributory benefits -Ìýenquiries about how benefit is affected by late payment should be referred to DWP

In circumstances where a self-employed earner was employed for a period before 6 April 2015 but failed to inform HMRC, NIM20000 onwards will apply in respect of the period up to and including 5 April 2015.

Spring Statement 2022

From 6 April 2022, the level at which people start to pay Class 2 NICs was increased to align with the Income Tax Personal Allowance.

A new threshold was introduced for Class 2 NICs, the 바카라 사이트˜Lower Profits Threshold바카라 사이트™ (LPT).

  • If a person바카라 사이트™s profits are less than the SPT, or they made a loss, they can choose to pay Class 2 NICs voluntarily to protect entitlement to State Pension and certain benefits. This has not changed.ÌýÌý
  • If a person바카라 사이트™s profits are from the SPT to the LPT, they will not need to pay Class 2 NICs, their contributions are treated as having been paid to protect entitlement to State Pension and certain benefits.Ìý
  • If a person바카라 사이트™s taxable profits are more than the LPT they must pay Class 2 NICs.Ìý

ÌýAutumn Statement 2023

From 6 April 2024, the LPT was removed which means that liability to pay Class 2 NICs no longer exists.Ìý

  • If a person바카라 사이트™s profits are less than the SPT, or they made a loss, they can choose to pay Class 2 NICs voluntarily to protect entitlement to State Pension and certain benefits. This has not changed.ÌýÌý
  • If a person바카라 사이트™s profits are at or above the SPT, they are treated as actually having paid Class 2 NICs to protect entitlement to State Pension and certain benefits.Ìý