New regulations make changes as a result of the removal of the requirement to pay Class 2 NICs, and the decision to treat those with earnings above the small profits threshold as though they had actually paid the contributions (for the purpose of entitlement to contributory benefits).
The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations, SI 2024/377, make various changes, including the following:
with effect from 2022/23, a self-employed earner who files their self-assessment tax return late will be treated for benefits purposes as having paid Class 2 NICs late. HMRC say that this ‘aligns with the rules for self-employed earners who, prior to 6 April 2024, were liable to pay Class 2 NICs and paid their contributions late’. Also, with effect from that tax year, those who are treated as having paid Class 2 contributions will be subject to a ‘residence and presence’ condition;
various existing legislation is updated from 2024/25 to reflect the substantive changes to Class 2 NICs; and
Part 4 of the new regulations maintains the requirement to file a self-assessment tax return so that HMRC can establish an individual’s eligibility to be treated as having paid Class 2 contributions.
The effect of the changes to Class 2 NICs can be summarised as follows. From 6 April 2024, no self-employed person will be liable to pay Class 2 NICs. Self-employed earners with profits at or above £6,725 (the small profits threshold) will be treated as having paid Class 2 NICs. Those with profits under £6,725 will continue to be able to pay Class 2 NICs voluntarily to maintain access to contributory benefits.
New regulations make changes as a result of the removal of the requirement to pay Class 2 NICs, and the decision to treat those with earnings above the small profits threshold as though they had actually paid the contributions (for the purpose of entitlement to contributory benefits).
The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations, SI 2024/377, make various changes, including the following:
with effect from 2022/23, a self-employed earner who files their self-assessment tax return late will be treated for benefits purposes as having paid Class 2 NICs late. HMRC say that this ‘aligns with the rules for self-employed earners who, prior to 6 April 2024, were liable to pay Class 2 NICs and paid their contributions late’. Also, with effect from that tax year, those who are treated as having paid Class 2 contributions will be subject to a ‘residence and presence’ condition;
various existing legislation is updated from 2024/25 to reflect the substantive changes to Class 2 NICs; and
Part 4 of the new regulations maintains the requirement to file a self-assessment tax return so that HMRC can establish an individual’s eligibility to be treated as having paid Class 2 contributions.
The effect of the changes to Class 2 NICs can be summarised as follows. From 6 April 2024, no self-employed person will be liable to pay Class 2 NICs. Self-employed earners with profits at or above £6,725 (the small profits threshold) will be treated as having paid Class 2 NICs. Those with profits under £6,725 will continue to be able to pay Class 2 NICs voluntarily to maintain access to contributory benefits.
