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


Alison obtained a First class degree in Accountancy and Management at UCLAN University. She then went on to qualify as a certified accountant in 2006 and became a founder member in 2011.

Alison trained at a practice in Liverpool and, within her 10 years there, she developed as an accounts manager and obtained a varied portfolio of clients which has provided her with a range of experience in accounts, audit, VAT and taxation.
Alison specialises in giving sound jargon-free advice to a range of small and medium sized businesses.

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