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Budget 2014 (9): Simplification for Class 2 NI could cause misery
by Susie Hughes at 19:49 20/03/14 (Political News)
The Government is planning to introduce legislation which will change the administrative process for the self-employed by bringing Class 2 NICs under Self Assessment alongside income tax and Class 4 NICs.
The Association of Taxation Technicians (ATT) has expressed disappointment at this and is urging the Government to reconsider the proposal which, it says, will change a straightforward user-friendly system into one where payments will be made much later and could affect entitlement to benefits in the meantime.

Class 2 NI contributions are those that are paid by the self-employed. The Government has expressed concern that a number of such individuals unfairly benefit from falling within the scope of the Small Earnings Exemption.

President of the ATT, Yvette Nunn, said: “We are keen to ensure that taxpayers are able to pay their contributions in the easiest way possible. The current system of payment by direct debit achieves that as it requires no effort on their part once set in place. Furthermore, we do not believe that any change should create the possibility of delays in the entitlement to appropriate benefits.

“In our response to HMRC’s consultation document issued in July 20131, the ATT pointed out that on the basis of the Government statistics provided within the document, the majority of self-employed individuals who would be paying Class 2 contributions were not within the scope of the Small Earnings Exception which seemed to be causing the concern that resulted in the Budget announcement.

“This majority, some 93 per cent of the self-employed population, were obviously finding payment by the current direct debit system easy and relatively painless in view of the modest amounts payable in each month. We find no justification for such a significant number of people having to endure unreasonable and unnecessary changes to what is and should remain a simple system for paying NI.”

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