Have your class 2 National Insurance payments stopped recently?
A reminder that the way class 2 National Insurance is paid is changing. You may recently have had a letter from HMRC about these changes. In most cases you need do nothing more; either you will pay class 2 National Insurance along with your self assessment tax bill, or HMRC will have contacted you to make separate payment arrangements.
But there are still some points you may want to consider.
- Payments for class 2 National Insurance by Direct Debit, both monthly and six monthly, stopped on 10 July 2015
- The last payment covered the period to 5 April 2015. This means that you have paid no contributions for the tax year 2015-16
- If you normally submit an annual self assessment tax return, your Class 2 National Insurance for 2015-16 will be collected along with any income tax and class 4 National Insurance due. This is payable by 31 January 2017 (the deadline for filing your 2015-16 tax return)
- You may want to set up a budget payment account now with HMRC to avoid a bill for a year’s class 2 National Insurance in one go (in addition to any income tax and class 4 National Insurance you may owe)
- In some cases, you may want to make voluntary payments of class 2 National Insurance to preserve your immediate benefit rights
What to watch for
Class 2 National Insurance gives entitlement to contributions-based benefits. If you are likely to want to claim contributions based benefits before January 2017, you may want to make voluntary payments in advance to protect your benefit rights – see https://www.gov.uk/voluntary-national-insurance-contributions.
Note, voluntary class 2 National Insurance Contributions are much cheaper than voluntary class 3 National Insurance Contributions. Not everyone is entitled to pay class 2 contributions ( see https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions).
If you are in self assessment
If you are self-employed, but have profits below the Small Profit Threshold (£5,965 for 2015-16), you are entitled to pay class 2 National Insurance on a voluntary basis. This will now normally be done on your self assessment tax return, but you may want to pay in advance.
If you are not in self assessment
You may not be in self assessment, but have paid class 2 National Insurance. For example you live abroad and pay class 2 to maintain your UK pension rights. If you are not in self assessment, but want to pay class 2 National Insurance, HMRC should have contacted you to arrange payment.
Spreading the cost
If you just want to spread the cost of your Tax and National Insurance bill, you can set up a Budget Payment Plan, go to https://www.gov.uk/pay-self-assessment-tax-bill/budget-payment-plan.
If you need to contact HMRC about class 2 National Insurance, you can phone on 0300 200 3505.