Paying class 2 NIC helps build entitlement to some benefits and the state pension. Significant changes were made to class 2 NIC with effect from 6 April 2024.  

For 2024/25 onwards, sole traders and self-employed partners do not need to pay class 2 NIC for a tax year if their profits for that year are equal to or more than the small profits threshold (SPT). Instead, class 2 NIC is treated as having been paid. The SPT is £6,725 for 2024/25 and £6,845 for 2025/26. Individuals with profits below the SPT continue to have the option of paying class 2 NIC on a voluntary basis in order to help maintain their entitlement to state benefits 

The changes to class 2 NIC appear to have given rise to an error in HMRC’s systems in some cases. ICAEW members have reported that, on submission of a tax return showing profits equal to or in excess of the SPT, HMRC has issued a self assessment calculation (SA302) with a correction message showing that class 2 NIC is payable.  

ICAEW understands that HMRC is currently working on a solution and expects to have this in place shortly. Taxpayers and agents who have been affected by the error are advised to contact HMRC. HMRC says that it will publish further information in due course. 

Taxpayers are encouraged to view their NIC record and check their entitlement to the state pension using HMRC’s app.