After recent changes in how Class 2 National Insurance is collected from those who are self-employed, more changes are on the way.
Class 2 NI is set to be abolished from 6 April 2018.
Class 2 NI contributions entitle sole traders to some important state benefits and state pension however, as it currently stands, Class 4 NI is essentially a tax in that contributions do not attract any benefits or pension entitlement.
Therefore, to account for the Class 2 abolition and the entitlements it provides, the Class 4 NI system is set to change, in order that sole traders can still be entitled to these important benefits.
Although this is a move towards tax simplification, there have been some criticisms of the changes as it could be more expensive to make voluntary contributions in future. We’d suggest its a good time to check your pension entitlement now. There’s details of how to do that here
The exact details of the reforms are yet to be announced, so watch this space!
Give us a referral and we will donate a goat to a family in AfricaFind out more