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H S and Son

National Insurance
« on: August 14, 2011, 06:09:50 pm »
Remind me guys, and please this is not about employees but for self-employed individuals like ourselves.

Class 2 N.I. is the fixed amount that we get billed for regularly or you might have a Direct debit set up for.

But what about the National Insurance we pay along with our tax. How is that worked out please?

Thanks in advance.

Pope vader

  • Posts: 1944
Re: National Insurance
« Reply #1 on: August 14, 2011, 06:19:35 pm »
think it is 8 %

H S and Son

Re: National Insurance
« Reply #2 on: August 14, 2011, 06:26:45 pm »
I thought it was 9% to be honest but what is it 9% of? Whats left once tax and costs have been deducted and is there a personal allowance for it as well or is it just 9% straight off?

♠Winp®oClean♠

  • Posts: 4085
Re: National Insurance
« Reply #3 on: August 14, 2011, 06:46:39 pm »
It's now 9%.

It's a bit like Income tax as it's paid on "profits" above a certain amount, that amount for 2011/12 is £7,225 & up to £42,475. Plus 2% on profits above £42,475.

♠Winp®oClean♠

  • Posts: 4085
Re: National Insurance
« Reply #4 on: August 14, 2011, 06:47:16 pm »
Oh, & it's Class 4 NI

H S and Son

Re: National Insurance
« Reply #5 on: August 14, 2011, 07:12:28 pm »
It's now 9%.

It's a bit like Income tax as it's paid on "profits" above a certain amount, that amount for 2011/12 is £7,225 & up to £42,475. Plus 2% on profits above £42,475.

How does that tie in with personal allowance then?

Are you saying whatever your profits are (income minus personal allowance minus costs) you then are taxed at 20% of that. You then have a figure left and you subtract £7,225 from that and whatever is left you are taxed at 9% of that to work out your Class 4?

♠Winp®oClean♠

  • Posts: 4085
Re: National Insurance
« Reply #6 on: August 14, 2011, 07:23:37 pm »
It's now 9%.

It's a bit like Income tax as it's paid on "profits" above a certain amount, that amount for 2011/12 is £7,225 & up to £42,475. Plus 2% on profits above £42,475.

How does that tie in with personal allowance then?

Are you saying whatever your profits are (income minus personal allowance minus costs) you then are taxed at 20% of that. You then have a figure left and you subtract £7,225 from that and whatever is left you are taxed at 9% of that to work out your Class 4?

There is a small difference in the amounts of both income tax & NI allowances. As far as I know, the IT allowance is nothing to do with the Class 4 NI one.

So, (as far as I'm aware) class 4 NI is turnover minus expenses minus £7,225 then 9% of the figure which is left over.

H S and Son

Re: National Insurance
« Reply #7 on: August 14, 2011, 07:41:13 pm »
Thankyou, I appreciate that.

Happy Christmas to you  ;D