8th December 2017
Self-employed individuals currently pay Class 2 National insurance. The charge is calculated as a flat rate weekly amount, currently £2.85 and paid along with the annual self-assessment tax liability.
In the March 2016 budget it was announced that the Class 2 charge was to be abolished with effect from 6 April 2018 and replaced with a reformed system of Class 4 National Insurance contributions.
Under the new system those with taxable profits below £6,025 will be liable to pay voluntary Class 3 National Insurance at £14.25 per week – more than 5 times the current Class 2 amount.
However, the government has decided delay the implementation of these changes by one year, to allow time for further consultation. This means all self-employed individuals continue to pay the weekly Class 2 amount, and those with low profits can breathe a sigh of relief for now.