Class 2 NIC's were originally going to be abolished next year and replaced with a new rate of Class 3 contributions for anyone earning over the small profit threshold of £6025.
However, the Government announced over the weekend that they have delayed this for another year in order to look into the impact the new law may have on self employed inidivudals with low income.
If you are self employed, from April 2019 if you earn over £6025 you will be required to pay Class 3 national insurance contributions at a rate 5 times higher than the current class 2 amount.
The Low Income Tax Reform Group has suggested to the Government that a lower rate of class 3 is included in the reform for those individuals that do have low profits below the threshold so that they can continue to make affordable contributions to their state pension fund.
If you are self employed and would like to discuss how these changes may affect you or for any other advice and tax planning please contact our Taxation Department on 0161 761 5231.
