National Insurance

pnepne Just JoinedPosts: 4Registered
When a person has been employed for 31 weeks of a tax year and then self-employed for the following 21 weeks up to 5th April, how is the national insurance due calculated.

Obviously the Class 1 primary has been paid by the employer on behalf of the employee at 11%, but 8% Class 4 NI is due on the self employment profits over £5035.

Is the P.A. pro-rated between employment and self employment in order to determine the self employment profit which NI needs to be paid on??

I'm a bit confused:confused1: - any help would be greatly appreciated.

Comments

  • peugeotpeugeot Experienced Mentor Posts: 624Registered
    Apply the full PA - don't time-apportion it.

    Kind regards
    Steve
  • pnepne Just Joined Posts: 4Registered
    So if the self employment profit for the 21 week period is less than £5000, then there is no Class 4 NIC to pay?

    Is this correct?

    Regards
  • peugeotpeugeot Experienced Mentor Posts: 624Registered
    Class 4 is 8% on profits between £5,225 and £34,840 with an additional 1% on earnings over £34,840 (2007/8 rates). For 2006/7 the thresholds were starting profits of £5,035 to £33,540 with additional 1% rates on profits over £33,540.

    Regards
    Steve
  • BluewednesdayBluewednesday Font Of All Knowledge Posts: 1,624Registered
    Can you post the figures and someone will work out the tax and NI for you.

    I've edited this post as I seem to be mixing my different classes of NI up!
  • deanshepherddeanshepherd Font Of All Knowledge Posts: 1,809Registered
    Don't think that will work!

    But in answer to the question, yes. If profits for that period are below £5k then there will be no Class 4 NI.
  • pnepne Just Joined Posts: 4Registered
    Cheers guys.

    It's sorted now - many thanks:001_tt2:
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