C1C2C3C4C5Part I Contributions
Pt. 1 modified (5.10.2009) by The Steps to Work (Miscellaneous Provisions) Order (Northern Ireland) 2009 (S.R. 2009/297), arts. 1(1), 2(1)(a)
Pt. 1 modified (6.4.2022 for the tax year 2022-23) by Health and Social Care Levy (Repeal) Act 2022 (c. 43), s. 2(3) (with Sch. para. 8)
Pt. 1 modified (6.4.2022 for the tax year 2022-23) by Health and Social Care Levy (Repeal) Act 2022 (c. 43), Sch. para. 5(1)(2)(4) (with Sch. para. 8)
Pt. 1 applied (with modifications) (6.4.2023 for the tax year 2023-24) by National Insurance Contributions (Reduction in Rates) Act 2023 (c. 57), Sch. para. 1(1)(2)(4)
Class 2 contributions
11F12Class 2 contributions
1
This section applies if an earner is in employment as a self-employed earner in a tax year (the “relevant tax year”).
2
3
“Relevant profits” means profits, from the employment, in respect of which Class 4 contributions are payable under section 15 for the relevant tax year (or would be payable if the amount of the profits were to exceed the amount specified in subsection (3)(a) of that section in excess of which the main Class 4 percentage is payable).
F154
For the purposes of this Act—
a
the “lower profits threshold” is F20£12,570, and
b
the “small profits threshold” is £6,725.
5
Class 2 contributions under subsection (2) are to be payable in the same manner that Class 4 contributions in respect of relevant profits are, or would be, payable (but see section 11A for the application of certain provisions in relation to such Class 2 contributions).
F145A
Subsection (5B) applies to an earner who has, for the relevant tax year, relevant profits of, or exceeding, the small profits threshold but which do not exceed the lower profits threshold.
5B
An earner to whom this subsection applies is treated, for relevant purposes, as having actually paid a Class 2 contribution under subsection (2) in respect of each week in the relevant tax year that the earner is in the employment.
5C
“For relevant purposes” means for the purposes of provision made by or under an enactment that—
a
is provision relating to benefits, or any other entitlement, provided for by or under an enactment, and
b
applies by reference (however framed) to Class 2 contributions (whether or not the provision refers to contributions treated as paid).
6
If the earner does not have relevant profits of, or exceeding, the small profits threshold, the earner may pay a Class 2 contribution of F19£3.45 in respect of any week in the relevant tax year that the earner is in the employment.
7
No Class 2 contributions are to be paid F16or treated as paid under this section in respect of any week in the relevant tax year—
a
before that in which the earner attains the age of 16, or
b
after that in which the earner attains pensionable age.
8
The Treasury may by regulations make provision so that, in relation to an earner, the Class 2 contribution in respect of a week is higher than that specified in subsections (2) and (6) where—
a
in respect of any employment of the earner, the earner is treated by regulations made under section 2(2)(b) as being a self-employed earner, and
b
in any period or periods the earner has earnings from that employment and—
i
those earnings are such that (disregarding their amount) the earner would be liable for Class 1 contributions in respect of them if the earner were not so treated in respect of the employment, and
ii
no Class 4 contribution is payable in respect of the earnings by virtue of regulations under section 18(1).
9
The Treasury may by regulations—
a
modify the meaning of “relevant profits”;
b
provide that Class 2 contributions under subsection (6) may not be paid—
i
if the employment or the earner is of a prescribed description, or
ii
in prescribed circumstances.
10
Regulations under subsection (9)(a) may amend this section.
11
Regulations under subsection (9)(b) are to be made with the concurrence of the Department.
11AF12Application of certain provisions of the Income Tax Acts in relation to Class 2 contributions under section 11(2)
1
The following provisions apply, with the necessary modifications, in relation to Class 2 contributions under section 11(2) as if those contributions were income tax chargeable under Chapter 2 of Part 2 of the Income Tax (Trading and Other Income) Act 2005 in respect of profits of a trade, profession or vocation which is not carried on wholly outside the United Kingdom—
a
Part 2 (returns), Part 4 (assessment and claims), Part 5 (appeals), Part 5A (payment of tax), Part 6 (collection and recovery) and Part 10 (penalties) of the Taxes Management Act 1970;
b
Schedule 24 to the Finance Act 2007 (penalties for errors);
c
sections 101 and 102 of the Finance Act 2009 (interest);
d
Schedules 55 and 56 to that Act (penalties for failure to make returns etc or for failure to make payments on time);
e
Part 4 (follower notices and accelerated payments) and Part 5 (promoters of tax avoidance schemes) of the Finance Act 2014;
F13ea
the provisions of Schedule 18 to the Finance Act 2016 (serial tax avoidance);
f
any other provisions of the Income Tax Acts as to assessment, collection, repayment or recovery.
2
But section 59A of the Taxes Management Act 1970 (payments on account) does not apply in relation to Class 2 contributions under section 11(2).
3
This section and section 11(5) are subject to any contrary provision in regulations made under Schedule 1 in relation to Class 2 contributions under section 11(2).
12 Late paid Class 2 contributions.
1
This section applies to any Class 2 contribution F2under section 11(6) paid in respect of a week falling within a tax year (“the contribution year”) earlier than the tax year in which it is paid (“the payment year”).
2
Subject to subsections (3) F3and (4) below, the amount of a contribution to which this section applies shall be the amount which the earner would have had to pay if he had paid the contribution in the contribution year.
3
Subject to subsections F4(4) and (6) below, in any case where—
a
the earner pays an ordinary contribution to which this section applies after the end of the tax year immediately following the contribution year; and
b
the weekly rate of ordinary contributions for the week in respect of which the contribution was payable in the contribution year differs from the weekly rate applicable at the time of payment in the payment year,
the amount of the contribution shall be computed by reference to the highest weekly rate of ordinary contributions in the period beginning with the week in respect of which the contribution is paid and ending with the day on which it is paid.
4
The F1Treasury may by regulations direct that subsection (3) above shall have effect in relation to a higher-rate contribution to which this section applies subject to such modifications as may be prescribed.
F55
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6
The F1Treasury may by regulations provide that the amount of any contribution which, apart from the regulations, would fall to be computed in accordance with subsection (3) F6... above shall instead be computed by reference to a tax year not earlier than the contribution year but earlier—
F8b
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F97
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Pt. I (ss. 1-19): power to modify conferred (7.2.1994) by 1993 c. 49, s. 35, Sch. 1 Pt. I para. 5(3)(d); S.R. 1994/17, art. 2
Pt. I (ss. 1-19) amended (1.4.1999) by 1999 c. 2, s. 3(1)(7); S.I. 1999/527, art. 2(b), Sch. 2