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:
- Invigilators and people who set exam questions.
- People who run businesses involving property or land.
- Non salaried ministers of religion (do not get stipend payments).
- People who make investments for themselves but not as a business.
- Those who are living abroad and but pay voluntary Class 2 contributions.
- A non-UK resident working as self-employed in the United Kingdom.
- Those who are working abroad.
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.
Same Day or Next Day Clearance
- Faster Payments using online or telephone banking
- CHAPS (Clearing House Automated Payment System)
- Paid at your bank branch or building society
Note: The service for paying Class 2 National Insurance at the Post Office has finished.
Up To 3 Working Days to Clear
- Bacs (formerly known as Bankers’ Automated Clearing Services)
- Payment made by posting a cheque
21 Working Days
- Direct Debit (if you do not already have one set up)
Note: Different payment types have different clearance times. Ensure you allow enough time for them to receive the payment before the deadline.
What Happens if You Miss the Payment 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.
Pay Class 2 Online: CHAPS, Telephone Banking, Bacs
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
Reference Number Rule
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.
Pay NI Contributions Online: Clearance Times
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.
Payments from Overseas
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
Non-UK Account Type
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.
HMRC Banking Address
Barclays Bank PLC
1 Churchill Place
Pay Class 2 NIC at Bank or Building Society
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 weekday, HMRC will take that day as the payment date and not the day they receive it.
Pay Class 2 by Cheque (through the post)
Send your cheque and the payslip that HM Revenue and Customs sent to you with the bill.
HMRC Address to Send Cheque
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 enquiries allow 3 working days from you posting date. Include a note asking for a receipt if you require one.
What if You Do Not Have HMRC Payslip?
Add a note to your payment method which includes the following information:
- Your full name, address, and reachable phone number.
- Your Class 2 National Insurance contributions reference number (or National Insurance number).
- The amount of Class 2 NIC you are paying and the period you are paying for.
Pay Class 2 Direct Debit Online
Follow these two steps to set up your Direct Debit payment for Class 2 NI:
- Download ‘form CA5601 to pay self-employed National Insurance contributions by Direct Debit‘ at HMRC.
- Complete the form and send to the address at the bottom of page 4.
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.
Self-employed National Insurance Rates and Exemption
National Insurance contributions for self-employed workers during the 2022/23 tax year will be:
- Class 2: Self employed with profits £6,725 or more a year.
- Class 4: Self employed with profits £9,880 or more a year.
Note: You can work out your annual profits by deducting your total expenditure from your self-employed income.
How Much is Class 2 National Insurance?
- Class 2 Rate for tax year 2022 to 2023: £3.15 a week.
- Class 4 Rate for tax year 2022 to 2023: 10.25% on profits between £9,880 and £50,270 (3.25% on profits over £50,270).
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.