You’ll need to pay Class 2 National Insurance if you’re self-employed. This is one of two types of National Insurance that you pay if you’re self-employed. You pay National Insurance, so you’re entitled to certain state-provided benefits such as the state pension. Self-employed people usually pay their National Insurance contributions through their Self Assessment tax return. However, if you’ve not yet registered as self-employed, you can do so by filling in a CA5601 form.

The amount of National Insurance you pay weekly is £3.05 (2020/21) unless your profits are below £5,965 a year, in which case you don’t have to pay anything. So, for example, if your earnings are between £6,032 and £50,000 a year, you’ll usually pay 12% of your profits in Class 4 National Insurance. 

If your profits are over £50,000 yearly, you’ll usually pay 2% of your earnings in Class 4 National Insurance. You’ll need to pay both Class 2 and Class 4 National Insurance if you’re self-employed and your profits are over £6,032 a year. If you’re employed and self-employed, you’ll only pay Class 2 National Insurance if your annual profits from self-employment are below £6,032. You can pay your National Insurance contributions online, by phone, or by post. The easiest way to pay is by setting up a Direct Debit.

We at Tax Accountant have built a countrywide network of reputable accountants to help you through the tax and financial challenges of running your own business. In addition, our team of tax experts is available to talk about your business’s specific requirements.