2 - National Insurance (Self-Test Questions) Flashcards
Does an employee have to pay National Insurance contributions (NICs) on vouchers redeemable for cash?
Yes
What are the rates of employees’ NICs?
11.5% between £242 and £967, and 2% over £967
What are the weekly primary contribution threshold and upper earnings limit (UEL) for NICs for employees?
£242 and £967.
Does an employer have to pay NICs on the benefit of a company car?
Yes
Why can directors not reduce NICs by paying the whole of their annual fee in one week?
Because they have an annual earnings period.
Which class of NICs payable by self-employed people confers entitlement to benefits?
Class 2 only.
Class 4 has no bearing at all on entitlement to state credit so should not be overpaid.
Why might an individual choose to pay class 2 NICs voluntarily?
This may be advisable to maintain the contribution record for State benefits, especially the new State Pension.
How much is the class 2 NI contribution?
£3.45 per week (if earnings over £12,570 per year).
When are class 4 NICs payable?
In two payments on account on 31 January in the tax year of assessment and 31 July following the end of the tax year of assessment, with a balancing payment or repayment on the following 31 January.
What are the class 4 NI contribution rates?
9% on profits £12,570 to £50,270; 2% on any excess over £50,270.
When someone is both employed and self-employed, what is the annual limit on class 4 NICs payable at the main rate?
Maximum class 4 NICs at the upper earnings limit (£3,393.00) less the main rate class 1 NICs paid.
Why might someone pay class 3 NICs?
To top up the contribution record to increase entitlement to benefits. Class 3 NICs are voluntary.
