National Insurance Contributions - NIC
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FWD can help you with every aspect national insurance (NICs) and help you get on with the things that matter. Everyone between the age of 16 and state pension age who's working pays National Insurance contributions (NICs) to HMRC. As a self-employed person, you pay less National Insurance than if you were an employee.
What are NICs?
If you're employed you stop paying National Insurance contributions as soon as you reach State Pension age. If you are self-employed, you stop paying Class 2 contributions as soon as you reach State Pension age and Class 4 contributions from the start of the tax year after the one in which you reach State Pension age. State Pension age is 65 for men born before 6 April 1959 and 60 for women born before 6 April 1950. But it will gradually increase to 65 for women between 2010 and 2020.
If you're self-employed
If you're self-employed you pay Class 2 and Class 4 National Insurance contributions. The rates are:
- Class 2 National Insurance contributions are paid at a flat rate of £2.40 a week
- Class 4 National Insurance contributions are paid as a percentage of your annual taxable profits - 8 per cent on profits between £5,715 and £43,875, and a further 1 per cent on profits over that amount
If your profits are expected to be less than £5,075 you may not have to pay Class 2 National Insurance contributions. You pay Class 2 National Insurance contributions either monthly by Direct Debit or by quarterly bill. You pay Class 4 National Insurance contributions when you pay your Income Tax.
Register with HM Revenue & Customs (HMRC)
It's important to let HMRC know that you're self-employed as soon as possible - even if you already fill in a tax return each year. If you don't tell them as soon as you begin self employment you may have to pay an initial penalty. FWD can do all this for you.
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