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From April 2016 Class 2 National insurance contributions will merge with Self Assessment.
In the past, when someone registers as self employed, HMRC would automatically register them also for Class 2 National Insurance. Class 2 is an additional contribution all self employed persons must pay, alongside Class 4.
Class 2 could either be paid, yearly, or monthly as a separate bill.
From April 2016, HMRC plans to include this payment along with Class 4 and tax due on Self Assessment, meaning, it will be due January of each year, and July also in some cases.
Op's Notes:
Over recent years, HMRC have failed on many occasions to register someone for Class 2 National Insurance when they registered as Self Employed, and many of them, to this day, have not received a demand for payment, nor any letters concerning it. Some don't even know what Class 2 is.
From April 2016 when Class 2 merges with Self Assessment, it may become more apparent to HMRC that some tax payers have not made any contributions, and will likely demand a payment in underpaid contributions, whether interest and penalties will apply I am uncertain.
However, it is my held belief that a tax payer should not be liable for this, and should argue this case as and when the demand happens.
It is the responsibility of HMRC to register all new self employed statuses for Class 2 Contributions, and it is also their duty, to send a demand, and/or statement, showing whether class 2 is due to be paid.
Because they have failed to do this, I believe means it is their responsibility for any underpayments and NOT the tax payer.
We may well see more activity surrounding Class 2 demands, in the next year or so, and wherever there is a case, I will try to help the tax payer here on AAD as much as possible.
In the past, when someone registers as self employed, HMRC would automatically register them also for Class 2 National Insurance. Class 2 is an additional contribution all self employed persons must pay, alongside Class 4.
Class 2 could either be paid, yearly, or monthly as a separate bill.
From April 2016, HMRC plans to include this payment along with Class 4 and tax due on Self Assessment, meaning, it will be due January of each year, and July also in some cases.
Op's Notes:
Over recent years, HMRC have failed on many occasions to register someone for Class 2 National Insurance when they registered as Self Employed, and many of them, to this day, have not received a demand for payment, nor any letters concerning it. Some don't even know what Class 2 is.
From April 2016 when Class 2 merges with Self Assessment, it may become more apparent to HMRC that some tax payers have not made any contributions, and will likely demand a payment in underpaid contributions, whether interest and penalties will apply I am uncertain.
However, it is my held belief that a tax payer should not be liable for this, and should argue this case as and when the demand happens.
It is the responsibility of HMRC to register all new self employed statuses for Class 2 Contributions, and it is also their duty, to send a demand, and/or statement, showing whether class 2 is due to be paid.
Because they have failed to do this, I believe means it is their responsibility for any underpayments and NOT the tax payer.
We may well see more activity surrounding Class 2 demands, in the next year or so, and wherever there is a case, I will try to help the tax payer here on AAD as much as possible.
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