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HMRC internal manual

National Insurance Manual

Class 2 National Insurance contributions: international: payment methods

International workers

Regulations 148B and 148C of the Social Security (Contributions) Regulations 2001 – see NIM71050

Depending on individual circumstances a self-employed earner abroad will fall into one of the following categories for the relevant tax year:

  1. Required to file a Self Assessment tax return – for any relevant tax year where the self-employed earner has profits from a trade carried out wholly or partially in the UK.

  2. Annual lump sum payment of Class 2 NICs – where the self-employed earner lives outside the UK for the whole tax year and is not resident for UK tax purposes.  If there are no profits in the UK, or other UK income then there is no requirement to file a Self Assessment tax return. However, where the self-employed earner remains subject to UK legislation under the EC Regulations or an international social security agreement, they are required to calculate their relevant profits for the purposes of working out their Class 2 NICs liability as if these profits were earned in the UK. If the relevant profits are at or above the small profits threshold (SPT) then there is a liability for Class 2 NICs. HMRC will issue a Class 2 bill no later than 31 October following the end of the tax year, and this must be paid in an annual lump sum payment by 31 January following the end of the relevant tax year.

If profits are below the SPT then the self-employed earner must inform HMRC, and can choose to pay UK voluntary Class 2 NICs, but only by an annual lump sum payment (see NIM72050).

A voluntary Class 2 payer has no liability to pay the contributions and will not be subject to any specific penalty (but may be subject to the higher rate provisions – see NIM72150).  However, payment after 31 January may affect entitlement to some contributory benefits.

Voluntary payers abroad

Regulation 147 of the Social Security (Contributions) Regulations 2001) – see NIM71150

For those self employed and not covered by the above provisions payment of voluntary Class 2 NICs from 6 April 2015 will be unchanged:

  • Annual payment – with a request being issued in arrears by HMRC in April (immediately following the end of the tax year). This differs from the annual lump sum method of payment applicable to other voluntary Class 2 NICs contributors.
  • Direct Debit – see   .