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Why your next tax bill will be higher

By Chris Dawson August 10, 2015 - 2:50 pm

National InsuranceIf you’re self employed you should have been notified by HMRC that your Class 2 National Insurance payments will no longer be collected by Direct Debit.

Up until now Class 2 contributions have been collected four months in arrears, but from April this year that changed and you’ll now pay them along with your self assessment tax, which will make your tax bill slightly higher in future years.

Although the change happened in April for the 2015-2016 tax year, this is the first month that you won’t see the monthly National Insurance direct debit leave your bank account.

If would prefer to spread the cost of your tax and Class 2 and 4 National Insurance over the year, rather than the normal half in January half in July arrangement, you can set up a budget payment plan with regular monthly or weekly payments instead. However if you’re disciplined it makes more sense to save the money and get interest on it right up until the payment deadline on January 31st.

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