Class 2 NICS for author

[vrdiver]

I have friend, an ex-colleague, who has given up paid employment and is now working on a book. They have registered as self-employed, but will earn no income for the next year (or more) whilst scribbling away.

Self employed, but no income, suggests they could pay voluntary class 2 NICS rather than the class 3 NICS if I understand the rules, but wanted to double check before I recommend that as the best course of action to secure his NI record for the year.

[mearnsfool]

I think I would do some dog walking or something else say a bit of gardening just to show say a few hundred in the books. Then tell HMRC and pay the Class 2 .

In the Spring budget the announcement was made that Class2 stops at 5 April 2018.

The finance bill was halted with the summer election as was the Class 2 ending and the tax free dividend allowance going from £5k a year to £2k a year together with a reduction in annual pension allowance for money purchase schemes where income had been taken..

Expect these items to be re launched in the Autumn statement in November and to be brought into law prior to April 2018

[chas49]

I think I would do some dog walking or something else say a bit of gardening just to show say a few hundred in the books. Then tell HMRC and pay the Class 2 .

In the Spring budget the announcement was made that Class2 stops at 5 April 2018.

The finance bill was halted with the summer election as was the Class 2 ending and the tax free dividend allowance going from £5k a year to £2k a year together with a reduction in annual pension allowance for money purchase schemes where income had been taken..

Expect these items to be re launched in the Autumn statement in November and to be brought into law prior to April 2018

The provision relating to "money purchase annual allowance" is included in Finance Bill: September 2017 (Clause 7) and will apply for tax year 2017-18 onwards.

The provision for Dividend nil rate is in Clause 8 of the Bill and will apply from tax year 2018-19

There is no provision in the Bill as published relating to abolition of Class 2 NICs, so presumably something will be announced in the Autumn Statement.

AIUI if/when Class 2 is abolished, your friend will only be entitled to contributory benefits (via Class 4 NIC) if his/her profits exceed the Small Profits Limit (I can't find what that figure will be at the moment but it should be around £6100)

[mearnsfool]

Yes the Ni regulations are not in the finance act . They are in the Social Security Contributions and Benefits Act which I believe will be published around the time of the Autumn statement.

Class 4 contributions will be changed and the provisional plan was detailed here. Wait for the Autumn statement but there may be some good news when the final details are finally published.

https://www.gov.uk/government/publicati ... tributions

[gadgetmind]

Google for "Class 2 delayed" and you'll see it's been put back until 2019.

A shame but it was a screaming bargain while it lasted and single tier has made it even better.

[mearnsfool]

I'm not convinced that backbench shire MP's will not infact fight for something similar to the Class 2 deal for low paid self employed if you read this.

The Government is announcing today that it will introduce the National Insurance Contributions (NICs) Bill in 2018. The measures it will implement will now take effect one year later, from April 2019. This includes the abolition of Class 2 NICs, reforms to the NICs treatment of termination payments, and changes to the NICs treatment of sporting testimonials.

The Government has decided to implement a one year delay to allow time 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 has committed to abolishing Class 2 NICs to simplify the system, so it is therefore right to take the time to ensure that there are no unintended consequences for the lowest paid.