Class 2 NI small profits threshold
25 February 2015, Advocates, Musicians, Sole Traders
Changes to Class 2 National Insurance from April 2015
The self employed have to pay Class 2 National Insurance if their profits are over the small earnings limit (£5,885 in 2014-15). HMRC has overhauled the system with the small earnings limit being renamed the Class 2 NI small profits threshold (SPT). Until recently self employed workers had to apply for a small earnings exception. From 2015-16 Class 2 NI will be payable on annual profits from £5,965 with income tax through self assessment in the same way as Class 4 NI. This means that Class 2 NI will be due on 31st January 2017 with income tax.
The National Insurance numbercard issued by the former Department of Health and Social Security to Zacarias Moussaoui (Photo credit: Wikipedia)
What is Class 2 National Insurance for?
Class 2 NI counts towards your state pension – assuming there will still be state pension when you get to retirement age. With earnings below the Class 2 NI small profits threshold it may still be in your favour to pay voluntary contributions to make sure you get the new state pension.
Contact Alterledger
For more information on registering as self-employed and completing your tax return, please contact Alterledger.
