Changes for the Self-Employed

Those with no profits chargeable to tax (under Chapter 2, Part 2 ITTOIA 2005) or profits below the new Small Profits Threshold (equivalent to the current Small Earnings Exception level) will no longer have to apply in advance for an exception from paying Class 2 NICs. Instead they will have the option to pay Class 2 NICs voluntarily at the end of the year as liability will not automatically arise.

The amount of Class 2 NICs due, which will still be calculated based on the number of weeks of self-employment in the year, will be determined when the individual completes their SA return and paid alongside their income tax and Class 4 NICs. For those that wish to spread the cost of their Class 2 NICs, HMRC will retain a facility for them to make regular payments throughout the year.