Calling authors earning less than £6205 a year: how will National Insurance changes affect you?

16 April 2018 Calling

Writers, illustrators and translators earning less than £6205 per year can currently make voluntary payments of £2.95 a week towards the state pension and other contributory benefits, in the form of Class 2 National Insurance Contributions (NICs).

What is changing?

The Government plans to abolish Class 2 NICs from April 2019. Self-employed workers earning below £6205 will still be able to make voluntary contributions towards their state pension – but only in the form of Class 3 NICs, which are £14.65 a week.

This adds up to £761.80 per year, a fivefold increase on the Class 2 annual contribution of £153.40. If you earn below £6,205, this will mean a minimum contribution of 12.3% of your income.

Will this affect you?

The Government claims that relatively few people will end up making this payment, as they will gain qualifying years for contributory benefits through other means, such as through additional employment or benefits. However, the Government’s own analysis suggests that 100,000 self-employed workers earning less than £6205 a year will end up making these payments of £14.65 a week (2% of a workforce of 5 million).

We are concerned that this change will disproportionately affect authors and other creators who are already struggling financially. Many have an author income below £6205, and some have no other sources of income.

The Society of Authors met with HMRC last week, and we said that we would submit further evidence of the impact these proposed changes would have on our members. If you are below state pension age and earn below £6205 per annum from your writing, and if you have no other sources of income, please get in touch with us to explain how you will be affected.

  • What are your views on the Government’s plans?
  • How will you budget for this higher amount?
  • Will you bite the bullet and pay the extra, or will this voluntary contribution represent a ‘luxury’ expense you can no longer afford?

 

You can post in the Comments section below or email us at tgallagher@societyofauthors.org by Monday 23 April. We will of course keep all examples anonymous in any correspondence with the Government.  

 

 

Comments

Martha Lea 18/04/2018 22:03:11
" I simply won’t be able to make the payments. There’s no way I can budget for that amount"
Helen Sandler 18/04/2018 11:55:19
" This is a very disturbing prospect for me. With an annual net income below £6k, I am only able to manage with the support of my partner. I am 50 and - although concerned by the rise in the state retirement age for women - I reassure myself that I will have a state pension because I have always made NI payments. The idea that I should pay five times as much seems completely unjust and is making me really worried. I simply can't afford to pay any more BECAUSE I'M ON A LOW INCOME. My income is from writing, freelance editing and underpaid freelance marketing or events work. This work was all much better paid ten years ago. Since the recession and changes in the publishing and arts world, I am underpaid by most clients. To be further penalised by the tax system for being a low earner seems a very cruel suggestion. Please urge the government to scrap these plans."
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