If you currently pay Class 2 National Insurance Contributions (either monthly, quarterly or by direct debit) then HM Revenue & Customs shall be writing to you shortly to explain that they are aligning the Class 2 NIC payment dates with those of Self Assessment. Consequently, to settle Class 2 NIC for the tax year 2011/12 the payments dates become 31 July 2011 and 31 January 2012.

In practical terms the transition will fall within one of the two categories below.

Payment by direct debit

Direct debit payments for 2011/12 will proceeds as follows:

  • Regular direct debits will be suspended between the months of April 2011 and July 2011
  • In August 2011 direct debit payment will commence
  • Thereafter regular direct debits will be taken monthly unless you chose to opt into a new direct debit regime making only two payments on 31 July and 31 January

Payment other than by direct debit

Where payment is made either by cheque or electronically (either at the post office or via your bank or internet transfer) then HM Revenue & Customs will send two payments requests; one in April 2011 for the 31 July payment and the second in October 2011 for the 31 January 2012 payment.

On a person note I only hope that the process of aligning Class 2 NIC payments with the Class 4 and Income Tax payments is a step process that does away with the Class 2 NIC payment all together. For at present it is a ridiculous exercise to collect £2.40 per week from the self employed as the contribution makes no impact whatsoever against the cost of running the NHS or saving towards and paying UK State Pensions.

copyright ©2011

This article is for discussion purposes only and does not represent advice on which you should act without consulting a professional as tax legislation is complex and changes frequently.

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