Policy paper

Draft legislation: abolition of Class 2 contributions

This draft legislation explains the abolition of Class 2 contributions.

Documents

Draft legislation: abolition of Class 2 contributions

This file may not be suitable for users of assistive technology. Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email different.format@hmrc.gsi.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Explanatory notes to the abolition of Class 2 contributions

This file may not be suitable for users of assistive technology. Request an accessible format.

If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email different.format@hmrc.gsi.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Details

Class 2 National Insurance contributions (NICs) are flat-rate weekly contributions paid by the self-employed to gain access to contributory benefits.

The 2016 Autumn Statement confirmed the government’s intention to abolish Class 2 NICs. This means that instead of paying 2 classes of NICs (Class 2 and Class 4), the self-employed will pay just one class of NICs (Class 4) in the future.

This builds on recommendations of the Office of Tax Simplification and will simplify the NICs system for millions of self-employed people.

Update

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 rather than 6 April 2018.

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.

Published 5 December 2016
Last updated 7 November 2017 + show all updates
  1. Updated following the government announcement that the abolition of Class 2 National Insurance has been delayed to 6 April 2019.
  2. First published.