Self-employed Class 2 National Insurance remains
If you’re planning on starting up your own business or if you’re currently self-employed, you will need to become familiar with the Self-employed Class 2 National Insurance Contribution. Harvey Telford & Bates Accountants can provide you with all the guidance you need on your business startup, financial matters and the Class 2 National Insurance.
The government recently made the decision not to proceed with its proposed plan to abolish Class 2 National Insurance Contributions (NICs) from April 2019.
Class 2 NICs are currently paid at a rate of £2.95 per week by self-employed individuals with profits of £6,205 or more per year.
The government had originally planned to scrap the Class 2 contribution and had been investigating ways in which self-employed individuals with low profits, could maintain their State Pension entitlement if this inexpensive contribution had been abolished.
Danielle Harvey, Director at Harvey Telford and Bates Chartered Accountants commented: “This is great news for self-employed people who will continue to pay the minimum. We will maintain our hands-on approach to support our self-employed clients at Harvey Telford and Bates.”
In a written statement to MPs, Robert Jenrick, Exchequer Secretary to the Treasury, stated that: ‘This change was originally intended to simplify the tax system for the self-employed. We delayed the implementation of this policy in November to consider concerns relating to the impact on self-employed individuals with low profits. We have since engaged with interested parties to explore the issue and further options for addressing any unintended consequences.’
‘A significant number of self-employed individuals on the lowest profits would have seen the voluntary payment they make to maintain access to the State Pension rise substantially. Having listened to those likely to be affected by this change we have concluded that it would not be right to proceed during this parliament, given the negative impacts it could have on some of the lowest earning in our society.’
If you’re self-employed and require guidance, or if you’re a budding entrepreneur looking to start working for yourself then give us a call today!
Call 01743 462604 or email [email protected] to speak to a member of our staff today.