NI Contributions

T.C.

I am getting myself a bit confused here. I have a client who is self-employed and paying Class 2 NI every month. They also pay Class 4 on their profits. Now, they also work part-time and pay NI on that too. Are they paying too much? Help appreciated.

villapb

The part time job will have the threshold of £149 per week applied to it, so 12% on pay above this threshold..............employer £148. NI each job has its own NI threshold unlike income tax which is accumulative.........ie its possible to have three part time jobs part jobs paying £120 each and thus pay NO NI but you will get a credit as over £107, but tax will be based on £360 each week

sharoneyre

They can ask for an exemption for paying class 2 if they are paying class 1 but class 4 still applied

sharoneyre

He can ask for an exemption for class 2 if he is paying class 1

zara5034

I thought that the Class 2 exemption only applied if the profits were below a certain threshold, and I imagine if he is already paying Class 4 then it won't be.

villapb

I'm afraid Sharon is incorrect, exemption only if self employemt below ~~ £5,725 ...........hmrc for some reason like to break down your income for NI............

sharoneyre

Well my daughter is self employed and works for an employer and she was given an exemption, I also have a client in the same situation and she too was given exemption

T.C.

Oh now I am confused. The client earns approx £20,000 in employments and £10,000 in self-employment. Anyone know where I can look for further information. Thanks again. :glare:

Ellabobbin

Here is a link which may help http://www.litrg.org.uk/low-income-workers/self-employed/checking-your-national-insurance-contributions-nic If you scroll down it states that class 2 NIC may be deferred if the individual makes class 1 contributions on employment income of £797+ per week... Sorry I couldn't copy n paste as I'm on my iPad...

T.C.

That is an absolutely brilliant link Ellabobbin. Thank you!!

villapb

That's the annual maxima rule where its thought too much NI will be paid, but that's usually if two employments paying class one, to be exempt form class two wont make much difference. You defer on least one of the employments the class one collections until the precise liability can be determined................