Are you a sole trader?

From April 2015 your liability to pay Class 2 National Insurance Contributions (NICs) as a sole trader or self employed person will be assessed annually when you submit your self assessment tax return. Payment will be made at the same time as your payment for tax and Class 4 NICs.  

In April HMRC sent out demands for Class 2 NICs which are paid in arrears and are due for the previous 6 month period.  If you have a direct debit set up to pay your Class 2 NICs the final payment will be taken on 10 July 2015.  

In October 2015 you will receive a statement of your account showing any outstanding amount due for the year 2014-15.  Outstanding amounts will be passed to their debt management department for collection.

This change to the way NICs are collected need to be taken into account when planning your tax payments in January and July.

Class 2 NICs are currently £2.80 per week and are paid if your profits are more than £5,965 per year.

Class 4 NICs are currently 9% on profits between £8,060 and £42,385 and 2% on profits above £42,385.