Plans to abolish Class 2 national insurances contributions have been cancelled as the government announces that it will remain in place.
The Government had planned to abolish Class 2 national insurance contributions from 6 April 2019 but the latest announcement from the Government is that these changes are to be scrapped and Class 2 NIC will remain in place.
Class 2 national insurance contributions are payable by the self-employed. Contributions are payable at a flat weekly rate and entitle the contributor to short-term contributions based employment and support allowance, maternity allowance, widowed parent’s allowance, state pension, and bereavement benefits.
For 2018/19 the weekly amount is £2.95. This is applicable where profits are at least equal to the small profits threshold of £6,205 and the number of weeks of self-employment in the year. The contributions are payable under self-assessment on an annual basis alongside Class 4 national insurance. Voluntary contributions may also be paid if profits are below the threshold.
It was announced this month that ‘A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the state pension rise substantially’. If this impacts you, get in touch with us to discuss matters further.
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