August 26th, 2015

Class 2 National Insurance collection is changing

Prior to 2015/16, you would have been receiving either a six-monthly bill for your contributions or you would be making monthly direct debit payments.  From 2015/16 this is being replaced by a single calculation when your self-assessment return is completed, in the same way as Class 4 contributions are collected.

If you are under the small profits threshold then you will be able to choose to pay voluntarily in order to protect certain benefits and your state pension.

Although this change came into effect from 6 April 2015, you may only just be noticing that your monthly direct debits have automatically stopped.  The last payment would have been the 10 July.

The Class 2 contribution will be automatically calculated when your 2015/16 tax return is completed and the contribution will fall due on 31 January 2017.  This is effectively providing you with an eighteen month payment holiday.  I would therefore recommend that you continue to put the £2.80 weekly /£12.13 monthly/ £145.60 annual amount to one-side.  You can make payments in advance to your HMRC online account to help with budgeting for this change.

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Freelancers National Insurance Contributions


Louise heads our Creative Team and specialises in providing friendly expert advice to actors, writers and other entertainment professionals.

Louise trained as a chartered accountant with Price Waterhouse in Liverpool before becoming a Senior Compliance Manager in the corporate tax department of the Manchester office.

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