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HMRC internal manual

National Insurance Manual

From
HM Revenue & Customs
Updated
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Class 2 National Insurance contributions: Small Earnings Exception: Policy on Paying Voluntary National Insurance contributions

Regulation 46(b) of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)

Although SEE removes the liability to pay Class 2 contributions, a person may pay Class 2 NICS voluntarily for periods during which SEE has been granted. Alternatively, they may pay Class 3 NICs if they are entitled to do so, see NIM25000 onwards.

It is important that self-employed contributors who are entitled to SEE consider the advantages of paying NICs to protect their rights to benefits. Before they apply for SEE they should be advised that there are potential benefits in paying Class 2 NICs as opposed to applying for SEE. If they are awarded SEE, they can still choose to pay voluntary NICs. Before making any decision they should seek further advice from DWP about their individual benefit position.

Class 3 contributions count towards a lesser range of benefits than Class 2, see NIM25002 for details. The weekly rate of Class 2 NICs is less than the weekly rate of Class 3 NICs and represents better value for money.