The rules for Class 2 NIC have changed for the 2022/23 tax year onwards.
Prior to the 2022/23 tax year you needed to pay Class 2 NIC if your profits were above the Small Profits Threshold.
For 2022/23 onwards, you pay Class 2 NIC if your profits are above the Lower Profits Limit (which is £12,570 in 2023/24 and was £11,908 in 2022/23). If your profits are below the Small Profits Threshold (£6,725 in 2022/23 and 2023/24) then you can choose to pay voluntary Class 2 NIC.
If your profits from self-employment are between the Small Profits Threshold and the Lower Profits Limit then there is no Class 2 NIC to pay – instead you will be treated as making Class 2 NIC. This will mean you will be able to access entitlement to contributory benefits in the same way as if you had paid Class 2 NIC.
For 2023/24 onwards, the Lower Profits Limit will be the same amount as the personal allowance for income tax (£12,570 for 2023/24).
| — | 2023 to 2024 | 2022 to 2023 | 2021 to 2022 | 2020 to 2021 |
|---|---|---|---|---|
| Small Profits Threshold amount per year | £6,725 | £6,725 | £6,515 | £6,475 |
| Lower Profits Threshold amount per year Self-employed people start paying Class 2 National Insurance once this threshold is exceeded | £12,570 | £11,908 | N/A | N/A |
| Rate per week | £3.45 | £3.15 | £3.05 | £3.05 |