Why am I being charged Class 2 National Insurance in my 2024/25 Self-Assessment?

Some self-employed taxpayers are mistakenly charged Class 2 NICs due to an HMRC IT issue. If your profits exceed £12,570, you should only pay Class 4 National Insurance, not Class 2. Always check your self-assessment 2024/25 calculation to ensure it is correct.

Do I need to pay Class 2 NICs through Self-Assessment for 2024/25?

No. From 6 April 2024, Class 2 NICs are voluntary for self-employed individuals with profits below £6,725. Voluntary contributions can help build qualifying years for your State Pension, but if your profits are above this threshold, Class 2 should not appear on your self-assessment.

What should I do if my Self-Assessment shows the wrong Class 2 NIC charge?

If you’ve filed your 2024/25 self-assessment and notice an incorrect Class 2 NIC charge, contact HMRC to request a correction. If you haven’t filed yet, consider waiting until HMRC resolves the issue (expected by September 2025).

What happens if I already paid the incorrect Class 2 NICs through Self-Assessment?

HMRC will refund or credit any incorrect Class 2 NIC payments to your self-assessment account once the error is fixed. Keep proof of payment and HMRC correspondence for reference.

When is the deadline for submitting my 2024/25 Self-Assessment?

The online filing and payment deadline for 2024/25 self-assessment is 31 January 2026. The HMRC Class 2 NIC error does not affect this deadline. Submit on time to avoid late filing penalties.

April Showers – Changes to The Tax Regime From April 2017

Local accountants and tax advisers, Trueman Brown, warn taxpayers about changes to the tax regime coming into force in April 2017.

The start of any fiscal year sees the enactment of a number of changes to the UK Code and April 2017 is no different to others.

Below is a list of changes that clients should be aware of: –

INCOME TAX – RATES AND RELIEF

From 6^th April 2017, the personal allowance will increase to £11,500 and the basic rate limit is £33,500.

The basic rate limit for Scottish taxpayers is lower at £31,500.

CAPITAL GAINS TAX – RATES AND RELIEFS

From 6^th April 2017, the annual tax exemption for individuals is £11,300 and for trust £5,650.

Gains will be taxed as follows: –

	Basic Rate Taxpayers	Higher and Additional Rate Taxpayers
On Residential Property and carried interest	18%	28%
Other Gains	10%	20%

INHERITANCE TAX – RELIEFS

April 2017 sees the phasing in of the “main residence nil rate band” or the “family home allowance” which is in addition to the existing tax-free inheritance tax allowance of £325,000.

The allowance is available to those passing on their main residence to a direct descendant.

For 2017/18 the allowance will be £100,000 and will rise in increments of £25,000 each fiscal year until it reached £175,000 in 2020/21.

CORPORATION TAX – RATES

The Corporation Tax rate for the year ended 31^st March 2018 will be 19%. The rate will eventually fall to 17% from April 2020.

DOMICILE

April 2017 sees a change in the law regarding the domicile of a taxpayer.

The new law states that any taxpayer that any taxpayer who has been resident in the UK for 15 out of the last 20 years will now be considered domiciled for tax purposes on the 16^th year of residency.

This will include years where the taxpayer was a minor (i.e., under 18 years of age).

The consequence of this change is that:-

The taxpayer will no longer be able to use the remittance basis of tax.
The taxpayer can no longer elect to become non-domiciled on a permanent basis.

VAT – RATES AND RELIEFS

VAT rates are unchanged.

However, from 1^st April 2017, the registration threshold will increase to £85,000 and the related de-registration threshold will increase to £83,000.

There is also a major change to the flat rate scheme with the introduction of the “low-cost trader” category.

PENSIONS – MONEY PURCHASE ANNUAL ALLOWANCE

From 6^th April 2017, there will be changes to the Money Purchase Annual Allowance (MPAA).

This allowance applies to scheme members who have already accessed their pensions but wish to continue making contributions.

The maximum contribution limit for such scheme members will reduce to £4,000 per annum.

PENSIONS – PENSION ADVICE ALLOWANCE

From 6^th April 2017, the Pension Advice Allowance was introduced. Taxpayers can take up to £500 from their money purchase scheme, on a tax-free basis, to pay for financial advice on retirement.

Taxpayers will be permitted three uses of the allowance but only once in any fiscal year.

PRIVATE BUY-TO-LET INVESTORS

From 6^th April 2017, investors will be unable to offset the cost of mortgage interest against rental income.

For 2017/18, only 75% of the mortgage interest will be deductible.

LIFETIME ISA

From 6^th April 2017, the Lifetime ISA (LISA) will be introduced.

The LISA has a dual purpose in helping to fund a first-time property purchase and for retirement.

Taxpayers under 40 years of age will be able to contribute up to £4,000 per annum with a bonus of 25% added by the Government.

TAX-FREE CHILDCARE SCHEME

The new scheme will be launched on 28^th April 2017 and will be phased during 2017.

Parent of children under the age of 2 will be able to join the scheme first. Eventually the scheme will be open to working parents with children aged under 12 or aged under 17 if the child has a disability.

Parents who open a tax-free childcare account will receive £2 from the government for every £8 they pay in. The maximum government top up is £2,000 per child per year or £4,000 if the child has a disability.

Parents of children aged between 3 and 4, will, from September 2017 onwards, be able to apply for 30 hours free childcare.

ISA ALLOWANCES

From April 2017, ISA allowance will increase to: –

£20,000 for adults.
£4,128 for Junior ISAs.

BUSINESS PREMISES RENOVATION ALLOWANCES (BPRA)

BPRA was 100% allowances given to taxpayers who invested in the converting or renovation of unused business premises in a disadvantaged area.

This allowance which was enacted in April 2007 ended on 31^st March 2017.

Local accountants and tax advisers, Trueman Brown, deliver vital services to small business. If you need any further advice, then please contact us.