Ch12: NIC

Question 1

How are Class 1 NIC payable?

Answer 1

• Payable by the PAYE system.
• EE Class 1 = Paid by Employees.
• ER Class 1 & 1A = Paid by Employers.

Question 2

Class 2 and 4 NIC are payable by:

Answer 2

The self-employed.

Question 3

What are the rates for Class 1 EE?

Answer 3

• Paid by employees.
• 12% = £12,570 - £50,270
• 2% = £50,270+

Question 4

What are the rates for Class 1 ER?

Answer 4

• Paid by employers.
• 13.8% = £9,100

Question 5

How much is the Employment Allowance?

Answer 5

£5,000.

Question 6

When is the Employment Allowance not available?

Answer 6

• Director is the sole employee.
• EE are paid below the threshold.
• Business’s total ER NIC liability in the previous TY was over £100,000.

Question 7

What are the rates for Class 1A ER?

Answer 7

• Paid by employers for any employees who are provided with any TAXABLE BENEFITS.
• 13.8%

Question 8

When should Class 1A ER be paid by?

Answer 8

Following the end of the TY:
- 19 July (Cheque)
- 22 July (Electronically)

Question 9

What are the rates for Class 2 NIC?

Answer 9

• Paid by self-employed.
• £3.45 per week if £12,570+.
• Self-Assessment.
• Due for payment on 31 January following the end of the TY (i.e. 2023/24 = 31 January 2025).