CLASS 2 NICS – NEW PAYMENT ARRANGEMENTS
Class 2 national insurance contributions (NICs) are currently payable by the self employed at a flat rate of £2.40 per week in 2010/11 (rising to £2.50 per week in 2011/12).Currently, these contributions are paid by quarterly account billing or by monthly direct debit. For April 2011 onwards, due dates for payment are to be aligned with the self assessment payment dates as for income tax and Class 4 NICs. This will mean that the payment will change for 2011/12. There will be no collections of monthly Class 2 NICs payments from April 2011 until August 2011. Monthly direct debits will then recommence from August onwards. This means that by January 2012 six instalments will have been paid, equal to half the liability for the year. By July 2012, the liability for the year will have been paid in full. Unlike income tax and Class 4 NICs there will be no balancing payment on 31 January 2013, as Class 2 is a set amount and does not need to be estimated. There will be an alternative option to pay Class 2 by two six monthly direct debits, one on 31 January in the tax year and one on 31 July following the end of the tax year, instead of paying monthly direct debits. If you have any queries please do not hesitate to contact us.