articles/Business/nationalinsurance-page1

Do I still pay national insurance when I'm self-employed? - part 1 of 1

Published 01/06/2006

Almost everyone who works for a living pays National Insurance. The two types of contributions payable by most self-employed individuals are Class 2 & Class 4.

Class 2

This is a fixed weekly amount paid by monthly direct debit or by a quarterly bill. These contributions count towards future benefits. However, if your earnings are below the small earnings limit (currently £4465 for 2006-07) you can apply for exception. You can still pay the contributions voluntarily in order to keep up your rights to benefits.

If you do not apply for exception, you must pay Class 2 contributions from the start of your self-employment. You can claim for a refund at a later date if you find that your income is below the limit, however, this must not be later than 31st January following the end of the tax year.

Class 4

If your profits exceed a certain limit you are required to pay Class 4 NIC in addition to Class 2 NIC. The limit for 2006-07 is £5035. These contributions are earnings related and they are calculated taking a percentage of your annual taxable profit from self-employment.

These contributions are payable to H M Revenue & Customs when paying your income tax and are calculated on the selfassessment tax return.

Note: If you are employed and self employed then you may also have to pay Class 1 NIC in addition to Class 2 and Class 4.

Go to http://www.taxbuddies.com/twd/swpp.htm

You are currently on page 1

• Do I still pay national insurance when I'm self-employed? page 1
  

1st Published 01/06/2006
last update 09/12/2022 14:56:54

More Business Articles

There are 0 days to get ready for The Society of Photographers Convention and Trade Show at The Novotel London West, Hammersmith ...
which starts on Thursday 1st January 1970