NI contributions - payment method changed

[Becky_simon]

Hi there

I am aware the way in which NI contributions are collected has changed. Am I correct in thinking the DD I have set up will no longer work as HMRC will be taking the contributions through SA Online?

 

[surf girl]

What is sa online? I haven't heared anything about changes to ni?

 

[Becky_simon]

SA stands for

What is sa online? I haven't heared anything about changes to ni?

SA stands for Self Assessment, the online process for sending your accounts online.

I had a letter saying they were collecting through SA

 

[Rachul123]

I haven't had a letter through, do you mean we now pay in bulk when we do our tax return? X

 

[Trinity]

The way NI contributions are paid and collected changed from April 2015 - you should have had a letter from HMRC, I did, but it didn't make things much clearer to be honest.

Here is the wording from the proposal paper:-

Detailed proposal
Operative date
The measure will have effect from April 2015. Class 2 NICs will be collected through SA from
April 2016, for the 2015-16 tax year onwards. The current six monthly billing system will
cease from April 2015.

Here is the current page from the HMRC website which explains why but no real details on how..

https://www.gov.uk/self-employed-national-insurance-rates

I'm assuming the amount required based on profits for the previous year will be added to the amount of Incoming Tax outstanding and you would pay it in one go like your tax. (I did see somewhere there would be an opportunity to pay in advance by installments if you wanted too, which is no different to the DD really)

 

[Becky_simon]

The way NI contributions are paid and collected changed from April 2015 - you should have had a letter from HMRC, I did, but it didn't make things much clearer to be honest.

Here is the wording from the proposal paper:-

Detailed proposal
Operative date
The measure will have effect from April 2015. Class 2 NICs will be collected through SA from
April 2016, for the 2015-16 tax year onwards. The current six monthly billing system will
cease from April 2015.

Here is the current page from the HMRC website which explains why but no real details on how..

https://www.gov.uk/self-employed-national-insurance-rates

I'm assuming the amount required based on profits for the previous year will be added to the amount of Incoming Tax outstanding and you would pay it in one go like your tax. (I did see somewhere there would be an opportunity to pay in advance by installments if you wanted too, which is no different to the DD really)

So does that mean the DD I had in place won't work? What I mean is do I need to do anything with the DD? Like cancel it? I'm quite happy to put money aside in a separate account so come year end my NI money is there to use

 

[Trinity]

So does that mean the DD I had in place won't work? What I mean is do I need to do anything with the DD? Like cancel it? I'm quite happy to put money aside in a separate account so come year end my NI money is there to use

I believe the HMRC will no longer collect the DDs.

I too, plan to put the NI money away as I go along, the same as I do for my tax.

I work out how much is due each month from that months takings, less 1/12th of last years total purchases, which gives me a rough idea of my profit, work out 20% and put that amount away. When the tax bill comes I'm ready to go, if I've saved too much then a little end of year bonus for me!