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.

Effective Pricing Strategies for Business Growth

Setting Your Pricing Objectives with Rainham Accountants

Before diving into numbers, you need clarity on what you want your pricing strategy to achieve.

As Rainham accountants, Trueman Brown emphasise that your pricing objectives should align with your broader business goals, marketing plans, and competitive positioning.

Typical objectives include:

Maximising short- or long-term profit
Growing sales volume or revenue
Gaining or defending market share
Achieving a target return on investment
Building or reinforcing your brand image
Surviving in challenging markets
Preparing for future exit or sale

Once your objectives are defined, you can choose the most appropriate pricing methods to support them.

Core Pricing Approaches Used by Rainham Accountants

Cost-plus Pricing with Rainham Accountants Insight

One simple and widely used approach is cost-plus pricing.

You calculate the direct and indirect costs of producing a product or delivering a service, then add a markup (often expressed as a percentage) to produce a final sales price.

However, cost-plus pricing has limitations — it doesn’t inherently account for how much a customer values your offering, or how changes in price might impact demand.

Value-based Pricing via Rainham Accountants Perspective

An alternative (and often more strategic) method is value-based pricing.

Here, you assess what the product or service is worth from the customer’s perspective, taking into account benefits, differentiation, and willingness to pay.

You then set the price accordingly, rather than merely marking up costs.

To make this work, you need insight into customer perceptions, competitor positioning, and what makes your offering unique.

Infographic showing Purfleet accountants’ step-by-step guide to preparing, pricing, and submitting a winning contract tender.<br />

Additional Pricing Techniques Considered by Rainham Accountants

Beyond the two core methods, businesses often adopt more specialised techniques — sometimes in combination — depending on market conditions:

Price skimming (initial high price, then gradual reduction)
Penetration pricing (low price to gain share)
Competition-based pricing (benchmarking against rivals)
Loss leaders (using one low-margin item to drive other sales)
Discriminatory (tiered) pricing (different segments pay different rates)
Premium pricing (positioning as a high-value or luxury option)
Psychological pricing (e.g. £4.99 vs £5.00)
Bundle pricing (grouping products/services together)
Option pricing (core product with paid add-ons)
Marginal cost / promotional pricing (using low price during specific periods)

Each of these methods has its pros and cons, and the best approach may shift over time depending on your objectives, your market, and your competitive pressures.

Understanding Price Elasticity & Demand

A central concept in pricing is price elasticity of demand (PED) — how sensitive the quantity demanded is to changes in price. If demand is elastic, a small price change may lead to a large change in sales volume; if inelastic, demand changes less.

Some factors influencing elasticity include:

Availability of substitute products or services
Whether the product is a necessity or discretionary
The proportion of the customer’s budget consumed
Brand loyalty and switching costs
Duration of the price change
Whether the buyer perceives the value and cost personally

If demand is inelastic, raising prices may boost revenue. But if it’s elastic, a price increase could reduce total revenue.

It’s also useful to look at how price changes affect total revenue, using a simple rule:

% change in revenue = % change in quantity demanded + % change in price

In practice, you’ll want to model multiple “what-if” scenarios and assess the risk and upside of each.

Practical Steps: How Rainham Accountants Help You Implement Pricing

As Rainham accountants working through Trueman Brown, we can guide you with the hands-on work behind your pricing strategy.

Some of the areas we support include:

Strategic planning & alignment with business and sales plans
Cost breakdowns, including fixed, variable, and hidden costs
Financial forecasting under different pricing models
Sensitivity and scenario analysis (e.g. what happens if demand falls)
Profitability modelling and margin stress testing

We’ll bring financial rigour, market insight, and practical recommendations to help you implement pricing changes with confidence.

How Trueman Brown (Rainham Accountants) Can Help You

If you’d like expert assistance in refining or revamping your pricing strategy, Trueman Brown is ready to support you.

Our team of Rainham accountants can work directly with you to analyse your costs, evaluate demand sensitivity, and map out sustainable pricing paths.

You can reach us at mark@truemanbrown.co.uk or by phone on 01708 397262 to discuss your pricing challenges or arrange a consultation.

Let’s ensure your pricing strategy drives growth, protects margins, and aligns with your long-term goals.

FAQs

Q: Do I have to use just one pricing method?
A: Not necessarily. Many businesses adopt a hybrid approach (for example combining value-based fundamentals with occasional promotional pricing or bundling). The key is consistency and clarity in your strategy.

Q: Has anything changed in tax, accounting, or regulation that affects pricing strategy?
A: The broad principles of pricing remain stable, though you should always monitor changes in VAT rules, accounting standards, cost pressures (e.g. inflation), and industry regulation. Your pricing must remain compliant and sustainable under evolving rules.

Q: How soon can I test a new pricing strategy?
A: You can pilot changes over a limited period or with a subset of clients or products. Monitor results closely (sales volume, margins, customer feedback), and adjust before rolling out broadly.

Q: Why should I partner with Rainham accountants at Trueman Brown rather than try this myself?
A: Pricing decisions interact with financial controls, forecasting, tax implications, and competitive positioning. Our team brings technical expertise, modelling capacity, and practical insight to reduce risk and increase your confidence.

If you have any further questions or would like us to tailor this more closely to your industry, just say the word.

Guide to businesses about pricing strategies