David Cutter Chartered Accountants

Tax Facts

Budget 2009

National Insurance Contributions

For employees' NIC, see Employee Taxation page. Self-employed people pay: * weekly Class 2 contribution of £2.40pw, unless they claim exception for small earnings (below £5,075). Usually paid monthly by direct debit * Class 4 NIC at 8% of taxable profits between £5,715 and £43,875. Profits over £43,875 will be charged at 1%. This is assessed and paid with the self-assessment income tax on profits Class 3 voluntary NIC may be paid at £12.05 per week by someone who is not in work but who wishes to maintain state pension rights.

Annual limits
Someone who is both employed and self-employed will pay Class 1, Class 2 and Class 4 NIC. It is possible to apply for deferment of Class 4 so that the Class 1 paid on earnings can be taken into account. Class 4 will then be charged through self-assessment at only 1%, and the overall balance of liability will be settled at a later date.

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

DAVID CUTTER & CO IS A TRADING NAME OF CUTTER & CO LIMITED

COMPANY NUMBER: 07252989

A MEMBER OF THE INSTITUTE OF CHARTERED ACCOUNTANTS IN ENGLAND AND WALES