Some changes to be aware of for 2014 /15
Class 2 National Insurance contributions (NICs) are becoming an annual charge for the majority of those who are self-employed for the 2015-16 tax year onwards. As a result Class 2 liability will not be determined until the Self-Assessment return is filed.
Small Earnings Exception (SEE) Certificates – renewals and applications
The current SEE arrangements will no longer apply from 12 April 2015. In February 2015 HMRC wrote to all those who currently hold a SEE certificate to advise them of these changes.
As a result there is now no need to renew or apply for a SEE. All existing SEE certificates will cease to be valid from 11 April 2015.
Liability for Class 2 NICs will now be determined by the level of profits declared when a person files their Self-Assessment return. If the level of profits doesn’t reach a Small Profits Threshold no Class 2 NICs will be due.
However, those below the threshold may pay Class 2 NICs voluntarily to protect their entitlement to certain benefits and State Pension as is the case now.
Class 2 NICs payments for 2014-15 tax year
Class 2 payment requests will be issued as normal in April 2015 to collect all Class 2 NICs to the end of the 2014-15 tax year.
Class 2 payments by Direct Debit
Direct Debits for the majority of self-employed persons will stop after collections have been made for the 2014-15 tax year. The last collection for the 2014-15 tax year will be made on 10 July 2015 since Direct Debits for Class 2 NICs are collected 4 months in arrears.