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National Insurance Contributions

For employees' NIC, see Employee Taxation page.

Self employed people pay NIC on their profits alongside the self-assessed income tax at these rates:

  • Class 2 NIC at £2.80 pw if profits for the year are £5,965 or more; and
  • Class 4 NIC at 9% of taxable profits between £8,060 and £42,385. Profits over £42,385 are charged at 2%.

Anyone not in work who wants to maintain state pension rights may pay Class 3 voluntary NIC at £14.10 pw. From 12 October 2015 to 5 April 2017 those who reach state retirement age before 6 April 2016 can top-up their state pension entitlement by paying voluntary amounts of Class 3A NIC.

Annual limits

Someone who is both employed and self employed may pay Class 1, Class 2 and Class 4 NIC. However, for 2015/16 and later years, both Class 2 and Class 4 NIC are collected through self-assessment. If the taxpayer has paid more than the annual limit of NIC for the year, Class 4 NIC will be charged at 2% rather than 9% for the year.

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Directors:  Paul Cutter FCA | Kate Jones FCCA, ACA | Dave Hazlehurst FCCA, CTA

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3 Lyttleton Court | Birmingham Street | Halesowen | West Midlands | B63 3HN

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