Government updates National Insurance Contributions

In Accountancy, News by Caroline

The government recently announced that it will not be abolishing Class 2 national insurance contributions (NICs) during this Parliament. As a result of this unexpected announcement, we wanted to provide you with an overview.

The government have recently announced the plan to abolish Class 2 NICs will not take place during this Parliament. During the 2016 budget, Chancellor George Osborne announced the abolition and stated that it would benefit an estimated 3.4 million self-employed workers.

After being delayed until April 2019, the government have now decided to scrap the plans entirely due to ‘negative impacts’ on low earners.

Voluntary contributions

Individuals can still choose to pay Class 3 NICs at a rate of £14.65 per week (2018/19). This entitles them to the State Pension, Bereavement Benefit, Maternity Allowance and contributory Employment and Support Allowance for self-employed workers.