NI Thresholds for Self-Employed in 2026/27: What's Changed?

Introduction

In 2026/27 a self-employed person pays Class 4 national insurance at 6% on profits between £12,570 and £50,270 and 2% on profits above £50,270, while Class 2 national insurance is no longer compulsory and costs £3.65 a week if paid voluntarily. The detail underneath those figures matters: the Small Profits Threshold has moved to £7,105, and earning a state pension qualifying year now works differently depending on which side of £7,105 and £12,570 your profits fall. Getting national insurance self-employed 2026 calculations right is the difference between an accurate January payment and an unwelcome surprise. Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice, works with sole traders across the UK on exactly this. This article sets out the Class 2 and Class 4 rates and thresholds for 2026/27, how each is paid, and what the changes mean for your state pension record.

Key Takeaways

• Class 4 national insurance is charged at 6% on self-employment profits between £12,570 and £50,270 in 2026/27, and at 2% on profits above £50,270.
• Class 2 national insurance is voluntary for the 2026/27 tax year and costs £3.65 a week, or £189.80 for a full year.
• The Small Profits Threshold for Class 2 national insurance is £7,105 for 2026/27.
• A self-employed person with profits between £7,105 and £12,570 receives a national insurance credit towards the state pension and pays no national insurance at all.
• Both Class 2 and Class 4 national insurance are collected through self-assessment and are due by 31 January following the end of the tax year, so 2026/27 liabilities are payable by 31 January 2028.
• Sole traders with qualifying income above £50,000 must keep digital records and file quarterly updates under Making Tax Digital for Income Tax from 6 April 2026.

What are the Class 4 national insurance rates and thresholds for 2026/27?

Class 4 national insurance is charged at 6% on self-employment profits between the Lower Profits Limit of £12,570 and the Upper Profits Limit of £50,270 in 2026/27, then at 2% on every pound above £50,270. Class 4 is the main national insurance cost for most sole traders and it applies to taxable profits after allowable expenses and capital allowances, not to turnover.

The Lower Profits Limit aligns with the personal allowance, so a sole trader whose profits sit at or below £12,570 pays no income tax and no Class 4. The 2% rate above £50,270 is deliberately low: national insurance, unlike income tax, does not escalate at higher profit levels.

Consider a sole trader with taxable profits of £62,000 in 2026/27. Class 4 on the band between £12,570 and £50,270 is £37,700 at 6%, giving £2,262. Class 4 on the £11,730 above £50,270 is charged at 2%, giving £234.60. Total Class 4 for the year is £2,496.60, paid through the same self-assessment return as the income tax. Note that Class 4 is not charged on rental profits, dividends, or interest: only trading profits fall within the charge.

Is Class 2 national insurance still payable in 2026/27?

Class 2 national insurance is no longer compulsory for self-employed people in 2026/27, but it remains available to pay voluntarily at £3.65 a week, or £189.80 for a full year. The mandatory Class 2 charge was removed from April 2024, and what replaced it is a credit system rather than a payment.

The Small Profits Threshold sits at £7,105 for 2026/27, and it is the pivot point. A sole trader with profits between £7,105 and £12,570 is treated as having paid Class 2 national insurance without handing over any money: HMRC awards a national insurance credit that counts as a qualifying year for state pension purposes. A sole trader with profits above £12,570 also secures a qualifying year, again through the Class 2 credit rather than the Class 4 charge, because Class 4 carries no benefit entitlement. In both cases, no Class 2 payment is needed.

Below £7,105 the position changes. No credit is awarded automatically, so a sole trader with profits of £5,400 gets nothing towards their state pension record unless they pay voluntary Class 2. At £189.80 for a full qualifying year, that is one of the cheapest ways to protect a state pension entitlement in the UK system: voluntary Class 3 contributions, the route open to those who are not self-employed, cost £18.40 a week, or around £957 for the same year.

For a full overview of how the classes fit together, see our guide to National Insurance for the self-employed.

How does self-employed NIC affect your state pension?

The full new state pension requires 35 qualifying years, and self-employed NIC is how a sole trader banks those years. The route depends on your profit level for the tax year.

Profits above £12,570 produce a qualifying year automatically through Class 4. Profits between £7,105 and £12,570 produce a qualifying year through a free national insurance credit. Profits below £7,105, including a loss-making year, produce nothing unless voluntary Class 2 is paid.

That last category deserves attention, because sole traders in a start-up phase or a bad trading year are the people most likely to miss it. A landscape gardener whose profits fell to £4,200 in 2026/27 following an injury would, without action, have a gap in their record. Paying £189.80 of voluntary Class 2 through the self-assessment return closes it. Check your national insurance record through your HMRC personal tax account before the January filing deadline, while there is still time to act.

When and how do you pay Class 2 and Class 4 NI as a sole trader?

Class 2 and Class 4 national insurance are both collected through self-assessment, not a separate national insurance system, and both fall due by 31 January following the end of the tax year. For 2026/27, which ends on 5 April 2027, the balancing payment is due by 31 January 2028.

Class 4 feeds into payments on account. If your total self-assessment liability exceeds £1,000 and less than 80% of your tax is collected at source, HMRC requires two payments on account towards the following year, due 31 January and 31 July, each equal to half the previous year's liability. Class 2, where paid voluntarily, is settled as part of the balancing payment only.

Making Tax Digital for Income Tax changes the reporting rhythm. From 6 April 2026, sole traders with qualifying income above £50,000 must keep digital records and submit quarterly updates to HMRC, followed by a final declaration by 31 January. Those above £30,000 join from April 2027, and those above £20,000 from April 2028.

What's actually changed for 2026/27, and what hasn't?

The headline change for 2026/27 is the Small Profits Threshold rising to £7,105 and the voluntary Class 2 rate rising to £3.65 a week; the Class 4 rates and the Lower and Upper Profits Limits are unchanged. The significant reform, the removal of mandatory Class 2, landed in April 2024 and has now bedded in.

What that stability masks is fiscal drag. The threshold freeze at £12,570 and £50,270, set against years of inflation, means more sole traders drift into the 6% band each year, doing the work a rate rise would otherwise do. The change that genuinely alters day-to-day life is Making Tax Digital going live from 6 April 2026: self-employed NIC is calculated the same way, but the information flowing to HMRC now arrives four times a year instead of once.

Frequently Asked Questions

Do I still have to pay Class 2 National Insurance if I'm self-employed?

No. Class 2 national insurance is voluntary for self-employed people in 2026/27. If your profits exceed £12,570 you secure a state pension qualifying year through Class 4 national insurance. If your profits are between £7,105 and £12,570 you receive a free national insurance credit. Only sole traders with profits below £7,105 need to consider paying Class 2 voluntarily, at £3.65 a week.

How much National Insurance will I pay on £30,000 of self-employed profit?

A sole trader with taxable profits of £30,000 in 2026/27 pays £1,045.80 in Class 4 national insurance. The calculation is £30,000 less the Lower Profits Limit of £12,570, giving £17,430, charged at 6%. No Class 2 national insurance is due, because profits above £12,570 secure a state pension qualifying year automatically.

What is the Small Profits Threshold for 2026/27?

The Small Profits Threshold is £7,105 for the 2026/27 tax year. It is the profit level at which a self-employed person starts receiving a free national insurance credit towards their state pension without paying anything. Below £7,105, no credit is awarded and voluntary Class 2 contributions at £3.65 a week are the only way to protect that year's record.

When do I pay my self-employed National Insurance?

Class 2 and Class 4 national insurance are paid through self-assessment by 31 January following the end of the tax year. For 2026/27, the balancing payment is due by 31 January 2028. Class 4 national insurance also counts towards payments on account, which are due on 31 January and 31 July where the previous year's liability exceeded £1,000.

Does Making Tax Digital change how I pay National Insurance?

Making Tax Digital for Income Tax changes how you report, not how national insurance is calculated. From 6 April 2026, sole traders with qualifying income above £50,000 must keep digital records and submit quarterly updates, plus a final declaration by 31 January. Class 2 and Class 4 rates and thresholds are unaffected, and payment deadlines remain the same.

Do I pay Class 4 National Insurance on rental income?

No. Class 4 national insurance applies only to trading profits from self-employment. Rental profits, dividends, savings interest and pension income fall outside the Class 4 charge entirely. A landlord with £20,000 of rental profit and no self-employment pays income tax on that profit but no Class 4 national insurance.

How Blue Tick Can Help

Blue Tick Accountants advises sole traders on national insurance planning, state pension record protection, and the Making Tax Digital transition, including whether voluntary Class 2 contributions are worth paying in a low-profit year. Getting the profit figure right is what drives the national insurance number, and that is where an adviser earns their fee. Head to our website and book a meeting now.

Conclusion

The self-employed national insurance position for 2026/27 comes down to three numbers: £7,105, £12,570 and £50,270. Above £12,570, Class 4 at 6% does the work and secures your state pension year automatically. Between £7,105 and £12,570, you pay nothing and still bank a qualifying year. Below £7,105, £189.80 of voluntary Class 2 is the cheapest state pension protection on offer, and it is the group most likely to overlook it. Check your national insurance record before your next return, and make sure your digital records are in order if MTD now applies to you.

About the Author

This guide was written by Leon, founder of Blue Tick Accountants, a Guildford-based UK tax advisory and accountancy practice that helps the self-employed, landlords and limited company owners across the UK. It was last reviewed for the 2026/27 tax year.

This article is intended for general informational purposes only and does not constitute tax, legal, or financial advice. Tax rules are subject to change and their application will depend on your individual circumstances. You should always seek advice from a qualified professional before taking action. Blue Tick Accountants accepts no liability for decisions made on the basis of this content.

Related reading: How Self-Employed NI Is Collected Through Self-Assessment.