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On 2 November 2017 the government announced a one year delay to the abolition of Class 2 NICs. Class 2 NICs will now be abolished from 6 April 2019. The delay will allow time for the government to engage with interested parties and Parliamentarians with concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits.
The government consulted between December 2015 and February 2016 on reforming self-employed NICs to protect access to the new State Pension and working age contributory benefits – this response document sets out how the government intends to proceed.
At the 2015 Summer Budget the government confirmed that it planned to abolish Class 2 National Insurance contributions (NICs) and reform Class 4 NICs to introduce a new contributory benefit test.
This consultation explores how a reformed self-employed NICs system could confer benefit entitlement and the policy choices that the government will consider in designing the new contributory benefit tests.
The government is seeking views from self-employed people, agents who act on the behalf of self-employed people and bodies that represent self-employed people. The government particularly welcomes responses from those who pay a special rate of Class 2 – Share Fishermen and Volunteer Development Workers – and other special groups such as Examiners and Ministers of Religion.
The deadline for responses is Wednesday 24th February 2016. When responding, please state whether you are doing so as an individual or on behalf of an organisation. The government is open to meeting with stakeholder groups during the consultation period.