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New Forest

05/12/2017

Treasury delays abolition of class 2 national insurance

Chancellor Philip Hammond has delayed the decision to abolish class 2 national insurance contributions (NICs) by 12 months.

The policy, which was first announced by Hammond’s predecessor George Osborne in 2016, would have seen class 2 NICs incorporated in reformed class 4 NICs from April 2018.

Self-employed workers earning less than £6,025 in 2017/18 can protect their state entitlements, including the state pension, by paying voluntary class 2 NICs at a flat rate of £2.85 a week.

The changes, which form the basis of the National Insurance Contributions Bill, will not come into force until April 2019.

Andrew Jones, exchequer secretary to the Treasury, said:

“The government has decided to implement a one-year delay to allow time to engage with invested parties on the abolishment of class 2 NICs on self-employed individuals with low profits.

“The government is committed to abolishing class 2 NICs to simplify the system, so it is right to take time to ensure there are no unintended consequences for the self-employed.”

For further information on Class 2 National Insurance Contributions, please contact Susan Andow on 023 8046 1214.

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