Under current rules, self-employed people have to pay Class 2 National Insurance contributions at £2.80 per week if they make a profit of £5,965 or more per year. They also pay Class 4 National Insurance contributions if their profits are over £8,060 per year (9% on profits between £8,060 and £43,000 and 2% on profits over £43,000).
From April 2018, Class 2 NICs will be scrapped and self-employed workers will only need to pay one type of National Insurance on their profits, Class 4 NICs.
Paying Class 2 NICs currently enables self-employed people to build entitlement to the State Pension and other contributory benefits. After April 2018, Class 4 NICs will be reformed so self-employed people can continue to build benefit entitlement.
This change means that self-employed people will save over £130 per year in National Insurance contributions.
If you would like any further information please contact us on 01229 813388 or email firstname.lastname@example.org
Have a great weekend!