If your profits are £7,105 or more, HMRC treats your Class 2 National Insurance as paid and collects nothing. You get the qualifying year on your National Insurance record without paying for it. That has been the position since 6 April 2024, and a great deal of published content still describes a weekly Class 2 bill that no longer exists.
Below £7,105 the position flips. Nothing is collected, nothing is credited, and if you want the year to count you have to volunteer to pay.
Here is how both classes work for 2026/27.
The two classes at a glance
| Class 2 | Class 4 | |
|---|---|---|
| Trigger | Small Profits Threshold £7,105 | Profits above £12,570 |
| At or above the threshold | Treated as paid — nothing collected | 6% to £50,270, then 2% |
| Below the threshold | Nothing collected, nothing credited — can pay voluntarily at £3.65 a week | Nothing due |
| Builds State Pension and benefit entitlement? | Yes | No |
| How it is dealt with | Through your Self Assessment return | Through your Self Assessment return |
The Small Profits Threshold rose from £6,845 to £7,105 for 2026/27. The Class 4 rates and thresholds are unchanged.
Class 2: the “treated as paid” mechanic
Class 2 used to be a flat weekly contribution with a liability attached to it. That liability was removed from 6 April 2024, when the Lower Profits Threshold was abolished.
There is now no Class 2 liability at all. What survives is a crediting rule: where a self-employed earner has relevant profits at or above the Small Profits Threshold, they are treated as having actually paid Class 2 contributions for that year. HMRC’s National Insurance Manual states it in exactly those terms.
The practical effect for anyone with profits of £7,105 or more:
- your Self Assessment return shows no Class 2 charge
- your National Insurance record gains a qualifying year
- your bill on 31 January is Income Tax plus Class 4 only
“Relevant profits” are the profits on which Class 4 is charged — your trading profits after allowable expenses and capital allowances, not turnover.
Below £7,105: the voluntary decision
If your profits are under the Small Profits Threshold, or you have no relevant profits at all, you can choose to pay Class 2 voluntarily to protect your entitlement to the State Pension and certain benefits.
The rate is £3.65 a week — £189.80 for a full 52-week year.
For a year that would otherwise be a gap in your National Insurance record, £189.80 is inexpensive.
How you pay depends on whether you have profits at all. If you have relevant profits below the threshold, you tick the voluntary Class 2 box on your Self Assessment return. If you have no relevant profits, you pay outside Self Assessment.
Check your record before you volunteer. If you were employed for part of the year and earned enough for Class 1 contributions, or you received National Insurance credits — for example while claiming Child Benefit for a child under 12 — the year may already qualify, and paying again buys nothing.
What each class actually buys
This is the part almost every article omits.
| Benefit | Class 2 | Class 4 |
|---|---|---|
| Basic State Pension | Yes | No |
| New State Pension | Yes | No |
| Contribution-based Employment and Support Allowance | Yes | No |
| Maternity Allowance | Yes | No |
| Bereavement Support Payment | Yes | No |
| Additional State Pension | No | No |
| New Style Jobseeker’s Allowance | No | No |
Class 4 counts towards nothing. GOV.UK says so directly. It is a tax on self-employed profits that happens to be called National Insurance. Class 2, which costs you nothing at all above £7,105, is the one that builds entitlement.
That is why self-employed people who lose work do not get New Style Jobseeker’s Allowance — it needs Class 1 contributions, and Class 2 does not qualify for it.
Class 4 at seven profit levels
Class 4 is 6% on profits between £12,570 and £50,270, and 2% on everything above £50,270. The 6% band is worth £37,700, so the maximum 6% charge is £2,262.00.
| Profit | Class 2 | Class 4 | Total NIC |
|---|---|---|---|
| £6,000 | Nothing collected or credited; £189.80 if you volunteer | £nil | £nil, or £189.80 voluntarily |
| £9,000 | Treated as paid | £nil | £nil |
| £20,000 | Treated as paid | £445.80 | £445.80 |
| £40,000 | Treated as paid | £1,645.80 | £1,645.80 |
| £50,270 | Treated as paid | £2,262.00 | £2,262.00 |
| £70,000 | Treated as paid | £2,656.60 | £2,656.60 |
| £100,000 | Treated as paid | £3,256.60 | £3,256.60 |
The workings. At £20,000: 6% of (£20,000 − £12,570) = £445.80. At £70,000: £2,262.00 plus 2% of £19,730 (£394.60) = £2,656.60. At £100,000: £2,262.00 plus 2% of £49,730 (£994.60) = £3,256.60.
Notice the £9,000 row. Profits are above the Small Profits Threshold but below the Class 4 starting point, so the year is credited and nothing is collected at all.
Your real marginal rate
Class 4 sits on top of Income Tax, so the combined figure is what actually matters when you are deciding whether to take on more work or make a pension contribution.
| Profit band | Income Tax | Class 4 | Combined |
|---|---|---|---|
| Up to £12,570 | 0% | 0% | 0% |
| £12,571 – £50,270 | 20% | 6% | 26% |
| £50,271 – £100,000 | 40% | 2% | 42% |
| £100,001 – £125,140 | 60% effective | 2% | 62% |
| Above £125,140 | 45% | 2% | 47% |
The £100,001 to £125,140 band looks wrong and is not. The Personal Allowance is withdrawn by £1 for every £2 of income above £100,000, so each extra pound of profit is taxed at 40% and also strips 50p of allowance that was previously tax-free — an effective 60%, plus 2% Class 4.
Class 4 falls to 2% at exactly the point Income Tax rises to 40%. That is why the combined rate rises to 42% rather than to 46%.
Paying it: dates and traps
Class 4 is assessed and collected through Self Assessment alongside Income Tax. For 2026/27 that means an online return by 31 January 2028 and payment by the same date.
Class 4 counts towards payments on account. Your two instalments, due 31 January and 31 July, are each half of the previous year’s Income Tax and Class 4 liability combined. They are not required if last year’s bill was under £1,000 or more than 80% of your tax was collected at source.
The registration trap. Registering as self-employed on form CWF1 enrols you for both Self Assessment and Class 2. If you were already registered for Self Assessment for another reason — dividends, rental income, the High Income Child Benefit Charge — and later start trading, you must register again using CWF1. Skip it and you are filing returns without being enrolled for Class 2, which leaves gaps in your National Insurance record that nobody will tell you about.
If you are employed as well as self-employed, you may pay Class 1 through your job and Class 4 on your profits in the same year. There is an annual maximum on the combined amount, and HMRC’s calculation adjusts the Class 4 due. Check the figure on your calculation rather than assuming it is right.
Frequently asked questions
Do I still pay Class 2 National Insurance in 2026/27?
Not if your profits are £7,105 or more. There is no Class 2 liability and nothing is collected, but you are treated as having paid it, so the year counts as a qualifying year on your National Insurance record. Below £7,105 nothing is collected and nothing is credited unless you choose to pay voluntarily.
How much is voluntary Class 2 for 2026/27?
£3.65 a week, which is £189.80 for a full 52-week year. You pay it through your Self Assessment return if you have relevant profits below the Small Profits Threshold, or outside Self Assessment if you have no relevant profits at all.
Does Class 4 count towards my State Pension?
No. Class 4 does not count towards any state benefit or pension. Class 2 is the class that builds entitlement to the State Pension, contribution-based Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment.
What are the Class 4 rates for 2026/27?
6% on profits between £12,570 and £50,270, then 2% on profits above £50,270. The maximum 6% charge is £2,262.00, because the band between the two thresholds is £37,700.
I claimed the £1,000 trading allowance, so I did not file a return. Does that year count?
Not automatically. If gross trading income was £1,000 or less you generally do not have to tell HMRC, and no return means no Class 2 credit. If you want the qualifying year you can register for Self Assessment voluntarily, file, claim the trading allowance and pay voluntary Class 2.
Getting your record right
The two questions worth asking every year are whether your profits cleared £7,105, and whether the year is already covered by employment or credits. Answer both and the National Insurance side of your return takes care of itself.
SmartFiling handles Self Assessment and MTD for Income Tax on a fixed fee, including the Class 2 and Class 4 position on your return. Every submission is reviewed by an ICAEW Chartered Accountant, and turnaround is three weeks from receiving your records.
