HMRC now collect Class 2 NI contributions (£2.80 per week) from sole traders when their self-assessment tax return is submitted.  In some cases it can be better to pay Class 2 NI even if earnings are below the threshold.

There is no requirements to make Class 2 NI contributions if you are below the small earnings exemption threshold (£5,965 for 2016-17). However, not making NI contributions could cause a gap in your NI record which may impact on your entitlement to certain benefits. Because of this sole traders may wish to make Class 2 NI contributions voluntarily.

You can check your National Insurance record here. We will check with you when we prepare your tax return whether you wish to make voluntary contributions to top up your record.

 

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.