Social Security Workshop - Digital Businesses' Views on Class 2 Contributions (for the self-employed)
Social Security are at the early stages of a review into the rules surrounding Class 2 contributions, which are paid by the self-employed.
The purpose of this workshop is to discuss the views of industry on the current Class 2 contribution system, giving due consideration to the option of the “deferred contribution rate” available to start-ups. The event seeks to look firstly to define a problem statement, how industry has/continues to overcome these problems and ultimately to propose long-term solutions.
The team at Social Security are particularly interested to hear concerns or feedback from people who have recently set up businesses and have had experience with the department.
The agenda is below and a more detailed brief will be sent out ahead of the meeting to attendees.
Overview of Social Security scheme (10:00 – 10:15)
What is social security and how do members benefit?
The Social Security Review and review of Class 2 rules
Summary of current system (10:15 – 10:30)
Employed people / self-employed people, and the Social Security benefits/pension
How the deferred rate option works for start ups
Discussion: Your experience and views on the Social Security scheme rules for start-ups and sole traders (10:30 – 11:15)
How do they affect you and your business? e.g. on Income and Security, cash flow, other effects on entrepreneurial behaviour
How much do you value the protection and pension record you get with your contributions?
A focus on the deferred rate: Has it met its objectives? How could it be improved? How about the administration or communication of the rules?
Discussion: Digital Jersey’s proposed solutions (11:15 – 12:00)
A transitional non-deferred flat rate contribution for between 12 and 24 months (note, this is a lower % or £ contribution rate for between 12 and 24 months with full entitlement to SS benefits
transitional exemption/social security credit to contribution for between 12 and 24 months (note: this means No contribution and full entitlement to SS benefits for up to 24 months)
An opt in/out system in return for a reduced rate of social security contribution (note: “A lower % contribution rate for self-employed with some, or no, entitlement to SS benefits)