Changes to Way Class 2 National Insurance is Paid

caledonia1972

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Most of us who are self-employed will be paying Class 2 NI contributions and I've just had a letter telling me that the way this is paid is going to change.

Up until now I have always paid my NI by monthly direct debit. This option is stopping as of April 2015. After April 2015 you will have to pay your NI through your tax return instead.

Now I know that in the long run it's 6 of one and half a dozen of another, and you'll end up paying the same amount. It's an easier pill to swallow though if you're paying £12 a month or so, rather than being landed with a bill for £150 at the end of the year. Not terribly happy about these changes but no options given for alternative arrangements.

It does say "proposed changes" though in the letter but still not happy!!!
 

sparkleandshine

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They bill me either 6 monthly or quarterly, not sure which, and I just pay the bills as they are sent out. I don't like the idea of having to pay it as part of your tax return on an annual basis either :(
 

caledonia1972

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it does say something in the letter about payment plans but it isn't clear if this is for people who pay just class 2, or those who earn enough profit to pay class 4 as well. I am quite happy paying by DD and don't like the idea of paying annually either.
 

katykicker

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Thanks for letting us know, sure my letter will be downstairs in postbox (too lazy to go check!).

I pay every 6 months but from what I've seen online you can login to add money to your account at any time, if they keep this option you could just login on the day you would have paid the direct debit and still pay it :) I hope?
 

nicki

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I pay mine 6 monthly as I'm doing it voluntarily. I don't actually earn enough to pay them but I heard that it effects sick pay, maternity pay and pensions? No doubt thats changed now though and I'm "throwing the money away". If I have to pay when the tax return is done then I'll be screwed as I save a little each month to pay it, and would never be able to pay it in one lump sum! :-\
 

katykicker

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Just found this:

'HM Revenue & Customs has indicated to self-employed earners that if their self-assessment payments are up to date and they would prefer to spread the cost of tax and NI contributions, there will be an option to set up a budget payment plan within self-assessment.'

Taken from here: http://www.scott-moncrieff.com/news/news-updates/proposed-changes-to-class-2-national-insurance
 

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