TAX: Class 2 NI to be paid via self-assessment
HMRC have announced that Class 2 National Insurance (NI) is to no longer be paid by direct debit and instead will make up part of the self-assessment tax calculation – a step to reduce the tax admin for small businesses.
Class 2 National Insurance is payable by self employed business owners earning profits of over £5,885 per year (14/15).
If profits are lower than this limit, small earnings exemption applies.
No more direct debits
Subsequently, HMRC are no longer accepting direct debit applications, instead, the taxpayer will receive a letter or statement requesting payment of any Class 2 NI up to 11 April 2015, after which the system changes.
No more deferment of Class 2 NI
Using the new system, taxpayers will also not be required to defer their Class 2 NI. Any new applications are not being accepted by HMRC and those who have an NI deferment in process should have received a letter in December to advise not to make further deferments.
All in all…
…it’s a good thing for business admin. The small amounts taken by direct debit each month to cover this NI are far better off being wrapped up and summarised on the tax calculation each year.
Figurit help assist with business admin for doctors and dentists. If you are self employed and this is relevant to you, call the team with any questions. We are happy to help.
020 7376 9333
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