NIM20700 | Class 2 National Insurance contributions liability: Breaks in self-employment

Regulation 3 and Schedule 2 of the Social Security (Categorisation of Earners) Regulations 1978 (SI 1978 No. 1689)

A person’s self-employment was treated as continuing unless and until they were no longer ordinarily self-employed. This means that, barring the exceptions covered in NIM20775, they remained liable for Class 2 National Insurance contributions (NICs) during

• temporary breaks in their work, for example holiday periods - including holiday periods spent abroad

• temporary periods without work.

A person who was self-employed even for a few hours each week was liable to pay Class 2 NICs, whether this was the sole source of employment, or in addition to any work as an employee. Such persons could claim Small Earnings Exception (SEE) if they believed their income from self-employment would be less than the SEE limit in any given tax year (£5,315 for tax year 2011 to 2012), see NIM21000.