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.

Latest Tweets

We are delighted to support the @WinchBizAwards in the Social Enterprise category, and to be taking part in the judging process. Good luck to all who enter! @hantschronicle @hantschamber @WinchesterBID #WBEA19

The Office for Tax Simplification has called for the inheritance tax system to be digitised in an effort to save executors and administrators time when completing the complex paperwork https://t.co/ho3DLaSx6j

Let’s Talk

Why not arrange a FREE consultation and find out what we can do for your business.