Class 2 Social Security contributions (FOI)

​Request 714824534

​Please can you tell me why the requirement to assess Class 2 social security contributions based on income from two years previously was not changed when the previous year basis of income tax for self-employed people was changed in 2019. Please could you tell me if there any plans to reform this as it is fundamentally unfair for somebody whose income is significantly decreasing.

Response

Individuals liable to pay class 2 social security contributions may be eligible to have their contributions calculated at a reduced rate.

The calculation for class 2 contributions (the reduced rate) is based on the most recent available tax data prior to the start of the year. To calculate the reduced rate for 2025, the most recent filed tax return is that for 2023; the 2024 return is not filed until mid-2025. This has been the case since the introduction of the reduced rate. The calculation of class 2 contributions is not connected to the prior year basis of taxation.

There are no plans to review the reduced rate calculation.​