What has changed
Class 4 National Insurance is charged at 6 per cent on profits between 12,570 and 50,270 pounds and 2 per cent above that. Class 2 is no longer compulsory once profits pass a set level, though you can pay it voluntarily to protect your State Pension.
Who it affects
Self employed sole traders and partners.
What you should do
Check whether voluntary Class 2 contributions are worth making to protect your State Pension record, especially if your profits are low. Make sure your return applies the correct Class 4 rate.
Our view
The Class 2 change is easy to overlook, but for lower earners a small voluntary payment can protect valuable pension years. We flag this for clients each year.
Common questions
Who does this affect?
Self employed sole traders and partners.
What should I do about it?
Check whether voluntary Class 2 contributions are worth making to protect your State Pension record, especially if your profits are low. Make sure your return applies the correct Class 4 rate.
Can TaxTune help me with this?
Yes. Tell us your situation through the quote builder or book a free call, and we will explain exactly what it means for you and handle it if you would like.
Related services and guides
Self Assessment service Allowable expenses guide Self employed NI