Sarah Bradford outlines National Insurance contributions changes affecting the self-employed from April 2024.
There is no ‘one size fits all’ as far as National Insurance contributions (NICs) are concerned. Different types of contributors pay different classes of NICs. Some classes secure entitlement to the state pension and contributory benefits; others are more akin to a tax. Some classes are earnings-related, whereas other classes of contribution are payable at a flat rate.
As far as the self-employed are concerned, once their profits reach a certain level, they currently pay two classes of contribution – Class 2 and Class 4. However, this is to change with effect from 6 April 2024, as Class 2 NICs are to be abolished from that date.
Nature of Class 2 NICs
Class 2 NICs are flat-rate contributions currently payable by self-employed