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From the 2015-16 tax year onwards the collection of Class 2 NICs will be through self-assessment (SA), allowing the self-employed to pay their income tax and Class 2 and Class 4 NICs together through one process.

From 6 April 2015 the self-employed will report their liability through their SA so Class 2 NIC will no longer be automatic. Those that report a profit below a new Small Profits Threshold (SPT) will not be liable for Class 2 NICs, but they will be given the option to pay it voluntarily to protect their entitlement to contributory benefits.

The self-employed will no longer have to apply for a Self-employed Exception Certificate (SEE) from 2015-16 onwards. Those with low profits or profits below the SPT, who do not wish to pay Class 2 NICs, will not be liable automatically for Class 2 NICs and therefore will not have to seek exception.

Article by ACCA In Practice