Reply To: Class 2 Self-Employed


The way I’ve always looked at it is that you are estimating someone’s future self-employed earnings so, yes, I will look at what they earned last year as a guide but, when estimating this years net earnings, I will use this years tax and NI thresholds. Not sure that there is any right or wrong though when it comes to estimating, it’s just a best guess and I’d argue my best guess should be based on the current tax and NI.

But reg 39 clearly says that the deductions for Tax and NI should be made at the rate applicable to the assessment period so if you are using previous tax years SE figures then you apply the Tax and NI deductions based on that tax years rates and thresholds.

In my opinion revoking reg 39(2)(a) seems to be unnecessary as Class 2 NICs still exist they are just treated as having been paid rather than actually payable so reg 39(2)(a) could remain in place and still have the effect of not making a deduction for assessment periods after 06.04.2024

“the amount of Class 2 contributions payable under section 11(2) or, as the case may be, 11(8) of the Act at the rate applicable to the assessment period”

This is straight forward if your assessment period of SE earnings was for any period before 06.04.2024 then you deduct class 2 NICs as they still would be payable for the assessment period.

if you leave reg 39(2)(a) in place and your assessment period is after 06.04.2024 (estimate for a new start up for instance) then the “amount of Class 2 contributions payable under the act” will now be £0.00 as it is now treated as paid rather than actually payable.

Unless I’m missing something