Threshold and contributions up before 2019 abolition.
It was announced earlier in November that the government has chosen to delay the abolition of class 2 national insurance contributions (NICs) by a year until 6 April 2019.
For 2018/19 the small profits threshold limit will be £6,205, with contribution rates above this threshold increasing by 10p to £2.95. The special classes of rates for share fishermen and volunteer development workers remain.
The proposed abolition of class 2 NICs and amendments to class 4 published in a policy paper of 2016 remain unchanged. The 2016 paper states that:
- Legislation will be brought forward to abolish class 2 NICs by repealing sections 11,11A and 12 of the Social Security Contributions and Benefits Act 1992, and to restructure class 4 contributions to include the small profits limit. Changes will also be made to the benefit entitlement rules to allow class 4 contributions to count for benefit entitlement purposes.
- Class 3 contributions, which can be paid voluntarily to protect entitlement to the state pension and bereavement benefit, will be expanded to give access to the standard rate of maternity allowance (MA) and contributory employment and support allowance (ESA) for the self-employed.
- Transitional arrangements will be provided to enable certain people with low profits, share fishermen and volunteer development workers to rely on their contribution record in the two years prior to class 2 abolition for longer than usual when claiming contributory ESA and, where eligible, contribution-based jobseeker’s allowance (JSA). These arrangements will remain in place until 1 January 2022.
Article from ACCA In Practice