The Treasury Minister, Alfred Cannan MHK, has announced a delay of 12 months in the abolition of Class 2 self-employed National Insurance contributions, following the announcement by the UK Treasury that it is delaying the abolition until 6 April 2019.
In this year’s Budget, the Treasury Minister announced that the Class 2 contribution would be abolished in the Island from April 2018 following a similar announcement by the UK Chancellor. The abolition of the Class 2 National Insurance contribution is part of a number of measures intended to simplify the current National Insurance system.
The delay means that individuals who are self-employed will continue to be liable to pay the Class 2 National Insurance contribution for the 2018/19 tax year and any change in the rate of Class 2 contribution to apply for that year will be announced in the Budget in February 2018.
The Treasury Minister said:
“The UK Treasury has reaffirmed its commitment to abolishing Class 2 and I can confirm that Treasury not only fully support the abolition of this particular contribution, but also remain firmly committed to simplifying the current system of National Insurance of which the introduction of the new state pension in 2019 forms a central part.”