Please be aware of the following update

On 2 November 2017 the Government announced that the National Insurance Contributions (NICs) Bill would be delayed until 2018. This means that the measures in the Bill will now take effect one year later from April 2019. The measures included in the Bill are:

The Abolition of Class 2 NICs

The NICs Bill would have abolished Class 2 NICs paid by the self-employed from 6 April 2018. This delay means that the change will be implemented from 6 April 2019 instead.

Class 2 NICs give access to contributory benefits like the state pension and are paid at the rate of £2.85 p/w (2017/18. Payment is compulsory if a self-employed person has profits in a tax year chargeable to income tax above the Small Profits Threshold (£6,025 in 2017/18. Otherwise, payment is voluntary.

Termination Payments

Currently ‘termination payments’ (payments received by an individual upon termination of their contract) are NICs-free. The Bill would have introduced a 13.8% NICs employer charge on payments above £30k per year from 6 April 2018. This delay means that the change will be implemented from 6 April 2019 instead.

Sporting Testimonials

This measure would align the NICs treatment of sporting testimonials with that of income tax from 6 April 2018. This delay means that the change will be implemented from 6 April 2019 instead.

The delay will allow more time to engage with stakeholders and Parliamentarians to address concerns relating to the impact of the abolition of Class 2 NICs on self-employed individuals with low profits.