The Spring Budget 2015 announced plans to abolish Class 2 National Insurance contributions (NICs) next year. In the meantime, the way those contributions are collected is changing and deferment applications are no longer needed for any clients with earnings likely to be below the small earnings threshold or with both self-employed and employed income.
From 2015/16 Class 2 NI, like Class 4, will be payable with income tax through self-assessment. Therefore, the Class 2 NI for the 2015/16 tax year will be due on 31 January 2017. For clients with small earnings, Class 2 NI will only be due on that date if their profits are above the small profits threshold (just a new name for the small earnings limit) which is set at £5,965 for 2015/16.
Payments will be collected through the normal process. If the taxpayer needs to make payments on account an additional 50% of the amount due will also be payable on 31 January 2016 with the remainder on 31 July 2016.
If you have any questions about National Insurance Contributions, please get in touch with Caroline Scull on 01420 88250.