Who has to pay Class 2 contributions?
You're liable to pay Class 2 contributions if you're:
How Class 2 contributions are assessed
The way that your Class 2 contribution is assessed is changing.
From January 2015, if you pay Class 2 Social Security contributions, you'll no longer have to provide the relevant tax assessment to the Social Security Department. We will be able to assess your Class 2 contribution using information from the Taxes Office.
We will only access the information that we need to assess your contributions. If you're not required to pay Class 2 contributions, your income information won't be shared.
How much are Class 2 contributions?
You're liable to pay the maximum rate of £688.14 per month unless you can have your contribution rate reduced.
Find out how much Class 2 contributions are for this year.
Paying reduced rate Class 2 contributions if you've recently become self employed
If you’ve recently become self-employed and you expect to earn less than you did when you were employed, you may be eligible to pay a deferred rate of contribution.
How to apply for the deferred rate of contribution
You need to visit the Contribution and Enforcement Zone, bringing with you your 2012 Income Tax notice of assessment. An adviser will explain to you the terms and conditions that apply when taking the deferred rate option.
You'll need to produce your Income Tax assessment as soon as possible for any year in which you pay a deferred rate of contribution. Your contribution rate will then be recalculated using the actual income from that assessment, and any under- or over-payment will be addressed.
Income limits for applying for reduced rate Class 2 contributions
In 2014, the annual total income on your 2012 tax assessment must be within the following limits:
|Upper Earnings Limit (UEL)||£155,568|
|Lower Earnings Limit (LEL)||£9,552|
In 2015, the annual total income on your 2013 tax assessment must be within the following limits:
|Upper Earnings Limit (UEL)||£159,624|
|Lower Earnings Limit (LEL)||£9,696|
You won't be entitled to a reduced rate figure if your income is not within these limits.
How reduced rate Class 2 contributions are calculated
Reduced rates are calculated using the figures declared on your 2013 income tax assessment, as this is an agreed income.
We can also use an estimated assessment, which will count as a claim.
We are unable to assess you on expected income.
If you were in full-time education or training during that year and were not liable to pay tax, we can still calculate a reduction for you.
Paying Class 2 contributions: how and when
We'll send you a Class 2 contributions statement every three months in arrears telling you how much you are required to pay.
If you don’t receive a statement, you must contact us immediately.
How to pay Class 2 contributions
You can pay by:
debit card, either by phone or in person
Direct Debit monthly in arrears
BACS payment directly into our bank account
Sort Code 40-25-34
Cheques should be made payable to the Social Security Department.
If you pay by Direct Debit
If you pay your Class 2 contributions by Direct Debit, you must ensure that the relevant year's tax assessment is submitted to the Contributions and Enforcement section by the middle of January.
Once your rate has been calculated, a form will be sent to you to agree, sign and return to the Contributions and Enforcement section.
If you fail to return this signed form by the end of January, your contribution rate may revert to the maximum rate for the February payment.
When you have to pay your contributions by
Use the table below to find out when the statements will go out and when you need to pay by.
January, February, March
Fifth working day of April
April, May, June
Fifth working day of July
July, August, September
Fifth working day of October
What to do if you don’t receive a Class 2 contributions statement
You must contact us if you haven’t received a Class 2 contributions statement. This doesn’t excuse you from paying and isn’t a valid reason for late payment.
Paying contributions if you’re unemployed or non-employed
If you’re unemployed or non-employed, you'll have to make sure that your contributions are either paid by you through Class 2 contributions or covered by contributions credits.
About contributions credits