Class 2 national insurance contributions

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Class 2 national insurance contributions

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

From 6 April 2024, self-employed people with profits equal to or above the small profit threshold are treated as having actually paid Class 2 national insurance contributions (NIC), and so are not required to pay Class 2 NIC but still have access to contributory state benefits, including the state pension.

The option to voluntarily pay Class 2 NIC where profit levels are below the small profit threshold is available in order to allow self-employed individuals to obtain NIC credits. For the 2026/27 tax year, the rate of Class 2 is £3.65 per week and the small profits threshold is £7,105 (£3.50 per week and £6,845 for the 2025/26 tax year).

Note that the ability for UK non-residents to pay voluntary Class 2 NIC for periods abroad is largely removed from 6 April 2026. This means the 2025/26 tax year is the last in which UK non-residents can pay voluntary Class 2 NIC (rather than voluntary Class 3 NIC) for time spent abroad. From 2026/27 onwards, UK non-residents must pay Class 3 NIC if they wish

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+
  • 16 Sep 2026 15:10

Popular Articles

Settlor-interested trusts

Settlor-interested trustsWhat is a settlor-interested trust?A settlor-interested trust is one where the person who created the trust, the settlor, has kept for himself some or all of the benefits attaching to the property which he has given away. A straightforward example is where a settlor

14 Jul 2020 13:38 | Produced by Tolley Read more Read more

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more Read more