CLASS 2 NIC: Those who are self-employed use voluntary Class 2 NIC to help qualify for benefits and the State Pension.
But what happens when you do not pay your tax bill through the normal Self Assessment system?
There are certain profession types which do not pay National Insurance through Self Assessment. The different types of occupations that do not pay through Self Assessment include:
You should receive a bill before the end of October from HMRC. Call the newly self-employed helpline if you do not receive a bill from them.
Note: The service for paying Class 2 National Insurance at the Post Office has finished.
Note: Different payment types have different clearance times. Ensure you allow enough time for them to receive the payment before the deadline.
You may need to pay extra Class 2 to fill any gap if you miss the deadline for National Insurance. HM Revenue and Customs will inform you how much you need to pay if this happens.
These types of payments go straight into the bank account at HM Revenue and Customs.
Sort Code: 08 32 20
Account Number: 12001004
Account Name: HMRC NICO
On your bill you will find a reference number. It is 18 alphanumeric characters. You must use this reference number (without spaces) to avoid delaying the payments.
If you are pay NI contributions online or by telephone banking (also known as Faster Payments) they are usually received by HM Revenue and Customs the same day or the next day. This will also include United Kingdom Bank Holidays and weekends.
If you pay by CHAPS it will be received the same working day. The payment must be made before your Banks processing cut-off time. Bacs usually take 3 working days to clear.
Note: Contact your bank before making any payment. They will tell you their processing times and transaction limits.
If you are paying from outside the UK, the HMRC account you send the payment to can vary. This is dependent on whether you are paying from a UK or non-UK account. You can paying Class 2 NIC from an overseas account in sterling or in other currencies.
Account Type: UK
Sort Code: 20 20 48
Account Number: 30944793
Account Number (IBAN): GB49BARC20204830944793
Bank Identifier Code (BIC): BARCGB22
Account Name: GBS Re NICO Receipts HMRC
Note: Pay to account name 'GBS Re NICO Receipts HMRC' for either account type.
Barclays Bank PLC
1 Churchill Place
Take the payslip that HM Revenue and Customs sent to you with the bill to your local branch. Make all cheques payable to 'HM Revenue and Customs only' then add your Class 2 NI reference number.
Your reference number is on the payslip. If you pay on a week day, HMRC will take that day as the payment date and not the day they receive it.
Send your cheque and the payslip that HM Revenue and Customs sent to you with the bill.
Make all cheques payable to 'HM Revenue and Customs only' then add your Class 2 National Insurance reference number. Your reference number is written on the payslip. Do not bend or fold your payslip and cheque. Do not staple or fasten them together in anyway.
Send your payment to:
HM Revenue and Customs
National Insurance Contributions and Employer Office
Benton Park View
Newcastle upon Tyne
Note: Before making any enquires allow 3 working days from you posting date. Include a note asking for a receipt if you require one.
Add a note to your payment method which includes the following information:
Follow these two steps to set up your Direct Debit payment for Class 2 NI:
They will confirm your Direct Debit has been set up within 21 days. You may see the payment reference 'HMRC NI-DD' on your bank statement.
As a rule, National Insurance contributions for those who are self-employed are:
Note: You can work out your annual profits by deducting your total expenditure from your self-employed income.
There are times when you do not need to pay NICs or cannot qualify for NI credits. But, you can choose to pay voluntary National Insurance contributions. You would be topping up any gaps that exist in your NI record.
Paying voluntary National Insurance counts towards many state benefits and towards the UK State Pension.
Employees usually pay Class 3 contributions whereas those who are self-employed or living abroad may choose to pay voluntary contributions instead.
How to Pay Class 2 Self-employed National Insurance Contributions