The Association of Taxation Technicians (ATT) are urging the government to reconsider plans to bring the collection of Class 2 national insurance contributions (NICs) into the self-assessment system, as announced in the Budget
The new system, the ATT warns, means that payments would be made later and could affect entitlement to benefits.
In the 2014 Budget, the government announced proposals to change the way NICs are collected as of April 2016, due to concerns that a number of such individuals unfairly benefit from falling within the scope of the Small Earnings Exemption.
In its Budget document, the Treasury announced this among other measures – following recommendations from the Office of Tax Simplification - to simplify the taxation of employee benefits and expenses, employee share schemes and partnerships.
ATT president Yvette Nunn said the association is 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 2013, 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 yesterday’s announcement.
‘This majority, some 93% 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,’ said Nunn.
The original Consultation document, Simplifying the National Insurance processes for the self-employed can be accessed here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/fil...