Changes to Uk National Insurance in today's Uk 2024 Budget. Class 2 NI contribution category to be removed

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davy200

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Hi, just reading some detail of proposed National Insurance Changes in the Uk Budget today. Some articles confirm that NI payments will be reduced, but one item on the BBC website mentioned the possible removal of a Class 2 contribution category altogether

"How is National Insurance changing for the self-employed?​

From 6 April 2024, two million self-employed people will pay 8% on profits between £12,571 and £50,270, down from 9%.
From the same date, they will no longer pay a separate category of NI called Class 2 contributions."

I guess there will be implications for those of us who are approved to pay Class 2 contributions then. More detail will come out shortly I expect.
 
That's for Self employed & UK resident.

It doesn't correlate to the voluntary NICs.

Having said that, it wouldn't surprise me if they close to new entrants after next years deadline.
 
The abolition of Class 2 contributions has been planned since 2015. The impact relevant to us in red:

The abolition of Class 2 National Insurance: Introducing a benefit test into Class 4 National Insurance for the self-employed

www.gov.uk

 
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Hm... still refers to self-employed though.

I've gone through the consultation paper.

It is very focused on self-employed.

Edit: updated my post - if you have Class 2 you keep it

Class 3 is still a good deal - just not quite as sweet as Class 2!

Edit to update: back in the Autumn statement, the general thinking was that overseas voluntary NICs would stay at the Class 2 rate. And so far I'm not seeing anything to contradict that.

So sit tight for a day or two till we get more info.
 
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DannyBoyD said:
Having said that; I can't imagine a position where overseas residents would pay less in NICs than UK residents & essentially get the same benefits.
Click to expand...
Do we get the same benefits though? I think class 3 payable while resident in the UK attracts unemployment benefit among other things.
 
Further update:

This is from HMRC forum in answer to question

"The changes to class 2 National Insurance contributions only affect customers that are liable to pay them.
If you are overseas and paying the class 2 contributions on a voluntary basis then the changes do not affect you and normal rules would apply."
 
Interesting article about this in Telegraph last week.
My read is that Class 2 is being abolished in April 2024, but for those of us making voluntary NICs it remains in place.

"telegraph.co.uk/money/tax/income/national-insurance-comprehensive-guide/"

Relevant section " Those with profits below £6,725, and any others who pay Class 2 NICs voluntarily to receive contributory benefits like the state pension, can carry on doing so."
 
Because the Daily Telegraph is a more reliable source than His Majesty's Revenue Commissioners (HMRC)?
 
Last year (on 8th April) I received my annual letter inviting me to pay my vol NICS for tax year 2022-2023 ….at class 2 rates. I’m watching my account on Gov Gateway to see what the cost of NICs will be for tax year 2023-2024. Still no change from what it said for many months (ie information not available) but on the basis of last year I’m expecting an explanatory letter shortly. Fingers crossed it’s still at class 2 rates.
 
I appear to have paid 2023-24 by accident. After getting a letter confirming I can back x years at Class 2, I paid one year's contribution at approx £160 (thinking it would go off the earliest year and planning to call them in a few weeks if there was no change in my contribution record) and its assigned to last year on my record now.
 
Just out of curiosity how long did it take from the time of sending it to show up on your online record?
 
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