SIMPLIFYING the way National Insurance contributions are paid by the self-employed will reduce their administrative burden by £74 million over five years, a senior Treasury minister has claimed.

Financial Secretary David Gauke called the current collection methods "confusing" as he outlined a series of proposed reforms in the House of Commons yesterday. As well as making the process more straightforward, he said the NI Contributions Bill would provide for accelerated payments in dispute-and-avoidance cases.

Mr Gauke told MPs "The objective ... is to modernise the way class 2 National Insurance contributions are assessed and collected, making the system simpler and more straight forward [and] reducing administrative burdens on the self-employed.

"The tax information impact note published by HMRC indicates a net administrative burden reduction to the self-employed of £74 million over five years as a result of these reforms."