National Insurance (NI) contributions are a tax on earnings and self-employed profits paid by:
They can help to build your entitlement to certain state benefits depending whether you are employed or self-employed. Your entitlement is also known as your national insurance or NI record.
Benefits which depend on your NI record include:
Benefits which do not depend on your NI record include:
There are 4 types of national insurance contributions and which one you pay depends on your age and your employment status.
This is paid by employees and employers.
This is paid by the self employed.if profits reach a certain threshold.
This is a voluntary contribution which can be made by anyone in order to fill gaps in their natioanl insurance record.
This is paid by the self employed if you have profits over a certain threshold.
!Autumn 2023 budget update! - The main rate of employees national insurance will fall from 12% to 10% from April 2024.
!Autumn 2023 budget update! - class 2 contributions will be abolished as of April 2024.
!Autumn 2023 budget update! - The main rate of class 4 contributions will fall from 9% to 8% from April 2024.
Class 1 employees contributions will be deducted by your employer as part of the PAYE process and, along with class 1 employers contributions, paid over to HMRC by your empoyer.
Class 2 and 4 will be calculated as part of your self assessment income tax retrun and has to be paid to HMRC by the 31st January following the end of the tax year.
Class 3 can be paid anytime to HMRC by cheque or payment online.
We can calculate your class 2 and 4 national insurance liability for a tax year as part of the process of preparing your income tax self assessment return.
If you are an employer, we can manage your payroll reporting for you to HMRC and let you know what the total class 1 national insurnace is payable by the next PAYE deadline..