Self-Employed NICs Rise: Class 2 Threshold and Rate Increase for 2026–27
Self-employed workers face a small increase in National Insurance contributions from April 2026. The Class 2 threshold rises to £7,105 and the weekly rate increases to £3.65, affecting sole traders and freelancers across the UK.
What's changing for self-employed NICs
The threshold over which Class 2 National Insurance contributions ("NICs") are treated as paid rises from £6,845 to £7,105. It also increases the rate at which Class 2 NICs are payable by self-employed earners from £3.50 to £3.65 per week. These changes take effect from 6 April 2026.
Who this affects
If you're self-employed in the UK—whether a sole trader, freelancer, or director of your own company—you pay Class 2 National Insurance. If you are self-employed as a sole trader and your gross trading income exceeds £1,000 in the tax year, you are required to register for Self Assessment and submit a return. This threshold applies regardless of whether the business is full-time, part-time, or run alongside employment.
Practical impact
Under the new rules, if your gross self-employment income is below £7,105 for the 2026–27 tax year, you do not pay the weekly Class 2 contribution—but you can still opt to pay voluntarily if you want to build National Insurance credits for the state pension.
The rate increase from £3.50 to £3.65 per week is modest (about 4%), but over a full year (52 weeks) at the new rate, the annual cost rises from £182 to £189.80. This is paid separately from income tax and Class 4 contributions (which are charged on profit).
For newly self-employed foreigners: These changes will be reflected in your first Self Assessment tax bill. Keep records of your business income and claim all allowable expenses to reduce your profit—this directly lowers both income tax and Class 4 NICs. HMRC will send you a Self Assessment notice if your income exceeds £1,000. If you're uncertain about your obligations or whether certain expenses are allowable, seek advice from an accountant before your first filing deadline (31 January 2027 for the 2025–26 tax year).
Sources
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