If you're self-employed you normally have to pay Class 2 National Insurance contributions. This guide explains how much you pay and the circumstances when you may be exempt from paying. To find out about your wider tax and National Insurance responsibilities when you're self-employed, read the related guide 'Self-employed tax and National Insurance' - you'll find the link under 'Further information' at the end of the page.
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You pay Class 2 National Insurance contributions at a flat rate of £2.75 a week. However, if your earnings are below £5,885 per year (2014 to 2015) you might not need to pay - see 'Exceptions to paying Class 2 National Insurance contributions' below.
Class 2 contributions count towards certain benefits, like the basic State Pension, Maternity Allowance and Bereavement Benefit. But any claims for benefits may be affected if your payments are late.
Class 2 contributions do not normally count towards the additional State Pension, Statutory Sick Pay, Jobseeker's Allowance or Employment Support Allowance, so you might want to think about making other arrangements like a personal pension and income protection insurance.
If you're a share fisherman paying Class 2 National Insurance contributions at the share fishermen rate, your contributions count towards Jobseeker's Allowance. The share fisherman rate of Class 2 contributions is £3.40 a week (2014 to 2015).
You can register for Class 2 National Insurance contributions when you register for business taxes with HM Revenue & Customs (HMRC) - find out how to do this by following the first link below.
If you are already self-employed and need to register for Class 2 National Insurance contributions, call the Newly Self-employed Helpline by following the link below.
Once registered, you can choose to make your payments either monthly or 6 monthly by Direct Debit. From April 2011 your Class 2 National Insurance contributions payments will become due on the 31 January and 31 July, the same dates as Self Assessment tax bill. Follow the link below to find out more about payment dates.
During periods when you are unable to work and where you have registered your work status with the Department for Work and Pensions (DWP), HMRC will be notified. They'll adjust the amount of Class 2 contributions due for those periods.
You don't have to pay Class 2 National Insurance contributions if any of the following apply:
If you earn less than £5,885 per year you can apply for a Certificate of Small Earnings Exception and not pay Class 2 National Insurance contributions. However, you might decide to carry on paying them voluntarily to keep your entitlement to the State Pension and other benefits.
You don't have to pay Class 2 National Insurance contributions for any complete week when you can't work due to illness or you're caring for someone and are receiving certain benefits, but you may be able to get National Insurance credits instead. Credits can help maintain your National Insurance record and so protect your entitlement to the basic State Pension and certain other state benefits.