Self-employed individuals will be able to pay their Class 2 NIC contributions through self-assessment alongside their income tax and Class 4 NICs. The legislation will be introduced through the National Insurance Contributions Bill, published on 18 July 2014.

Liability for Class 2 NICs will arise at the end of each tax year and will be collected through self-assessment from April 2016 for the 2015/16 tax year onwards.   This will replace the current method of collection of Class 2 NICs via direct debits or quarterly demands.

Taxpayers will also be able to make voluntary payments of Class 2 NICs if their profits are below a certain threshold to retain their entitlement to certain state benefits.