On 6 September 2018 the UK government announced that the planned abolition of Class 2 national insurance contributions would no longer be carried out in this parliament.
The UK government had previously announced that Class 2 national insurance contribution s – a flat rate contribution paid by the self employed – would be abolished. The original planned date for the abolition had been 6 April 2018 but this was delayed for twelve months, and has now been shelved for the duration of the current parliament.
In 2018/19 Class 2 national insurance contributions are payable at a flat rate of GBP 2.95 per week by self employed individuals on annual profits above GBP 6,205. Below the GBP 6,205 threshold voluntary payments are possible.
A written Ministerial statement explained that the original twelve month delay to the measure had been used to consider the impact on those self employed people whose profits were below the threshold for Class 2 contributions. These people have the option of paying voluntary Class 2 national insurance to maintain their access to the State pension. Under the proposals the voluntary payment would have risen significantly. This negative impact on the lowest earners would have affected around 300,000 people and was taken into account in taking the decision to scrap the proposals.
