'Our vision is to become your partner and understand your business, your finances, your business problems and your aspirations'.

Self-employed individuals pay two types of national insurance contributions (NIC); class 2 at a flat rate of £153.40 per year if annual profits are at least £6,205, and class 4 which is calculated as 9% of profits above £8,424, reducing to 2% of profits above £46,350.

Class 2 NIC buys entitlement to the state pension and certain other benefits; class 4 NIC buys no such entitlements.

The Government had proposed merging classes 2 and 4 NIC. The self-employed would pay one class of NIC, which would provide state benefit entitlements, and a NIC credit given for profits between £6,205 and £8,484. However, it has now decided not to go ahead with that merger.

This is good news for those with profits of less than £6,205, as they can continue to pay class 2 NIC voluntarily at £153.40 per year, to accrue state pension entitlements. The alternative for those with very low profits would be to pay class 3 NIC of £761.80 per year, but class 3 NIC doesn’t provide entitlement to other state benefits.

Non-resident individuals, who previously lived in the UK for at least three years and paid NIC during that time, will be able to pay class 2 NIC on a voluntarily basis to build entitlement towards the UK state pension and other benefits.

  • icaew firm logo black
  • foot logo2
  • AA10793 Stockport Business Awards Logo 2019 horizontal





 twitter      orange linkedin 256      Facebook





Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.