Class 2 national insurance contributions

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

From 6 April 2024, self-employed people with profits above the small profit threshold are not be required to pay Class 2 NIC but still have access to contributory state benefits including the state pension.

The option to voluntarily pay Class 2 NIC where profit levels are below the small profit threshold of £6,845 is available in order to allow self-employed people to obtain NIC credits and the rate is a weekly rate of £3.50 for 2025/26 (£3.45 for 2024/25).

The commentary below therefore applies up to 5 April 2024 and to those wishing to voluntarily pay Class 2 NIC.

For Class 4 contributions, see the Class 4 national insurance contributions guidance note. For relevant types of NIC in relation to employed people, see the Overview of NIC Classes, rates and thresholds guidance note.

Class 2 NIC overview

Prior to 6 April 2024, Class 2 NIC arose where a self-employed individual had income chargeable to tax as trading income, although there were certain exemptions which are considered below. Class 2 NIC are flat rate contributions

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Substantial shareholding exemption ― overview

Substantial shareholding exemption ― overviewThe substantial shareholdings exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. No claim is required. Provided

14 Jul 2020 13:44 | Produced by Tolley Read more

Personal Tax

Foreign self-employment

Foreign self-employmentTrading in another jurisdiction involves many issues, only some of which involve taxation. Advice should be taken, not only in relation to tax but on the wider business implications. For an overview of the points to consider for certain jurisdictions see Tolley's Global

14 Jul 2020 11:44 | Produced by Tolley Read more

Value Added Tax

Payments on account (POA)

Payments on account (POA)This guidance note provides and overview of the payments on account regime (POA). More in depth commentary can be found in De Voil Indirect Tax Service V5.110.What are payments on account?VAT registered businesses with an annual VAT liability of more than £2.3m are required

14 Jul 2020 12:52 | Produced by Tolley Read more

��Ӱ��