Reply To: Class 2 Self-Employed

Peter Barker

Hard to tell: it’s a bit of a mess. Reg 39(2)(a) required Class 2 contributions to be deducted at the rate applicable to the assessment period, so that is unlikely to be 2024/25 for current HB calculations.

Reg 39(2)(a) is revoked by the Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024, which came into force on 6 April 2024. So far, so good: it looks as if Reg 39(2) no longer applies from 6/4/24.

But the amendments are in Reg 8, which is in Part 3 of the amending regulations, and Reg 1(4) says “Parts 3 and 4 have effect for the tax year 2024-25 and subsequent tax years”, which you could interpret as meaning that Reg 39(2)(a) is only revoked for the purpose of assessment periods falling in the 24/25 tax year onwards.

Otherwise, you’ll be using Class 4 NI rates for the assessment period, but not deducting Class 2, so it will be a hybrid of two years’ NIC rules.

Consiodering most HB claimants’ S/E earnings are a roug estimate to start with, this is another demonstration of the principle: measure with a micrometer, mark with chalk, cut with an axe.