Chapter 12 - National Insurance Flashcards by Stephen Moule

Q

What is the basis of assessment for Class 1 employee?

A

Percentage based contribution on earnings over employee threshold £8632

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Q

What is the basis of assessment for Class 1 employer’s?

A

Percentage based contribution on earnings over employer threshold £8632

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Q

What is the basis of assessment for Class 1A?

A

Percentage based contribution of taxable employment benefits provided to employees (Paid by employer)

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Q

What is the basis of assessment for Class 2?

A

Flat rate weekly contribution

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Q

What is the basis of assessment for Class 4?

A

Percentage based contribution on earnings over threshold £8632

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Q

Is the below gross earnings for NIC purposes?

wages, salary, overtime pay, commission or bonuses

A

Yes

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Q

Is the below gross earnings for NIC purposes?

exempt employment benefits (e.g. employer contributions into a pension scheme, a mobile phone, etc.)

A

No

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Q

Is the below gross earnings for NIC purposes?

sick pay, including statutory sick pay

A

Yes

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Q

Is the below gross earnings for NIC purposes?

Most taxable non-cash benefits except remuneration received in the form of financial instruments, readily convertible assets and non-cash vouchers

A

No

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Q

Is the below gross earnings for NIC purposes?

tips and gratuities paid or allocated by the employer

A

Yes

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Q

Is the below gross earnings for NIC purposes?

Reimbursement of the cost of travel between home and work

A

Yes

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Q

Is the below gross earnings for NIC purposes?

vouchers (exchangeable for cash or non-cash items, such as goods).

A

Yes

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Q

Is the below gross earnings for NIC purposes?

Tips directly received from customers

A

No

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Q

Is the below gross earnings for NIC purposes?

mileage allowance received from the employer provided it does not exceed the HMRC approved mileage allowance rate of 45p per mile

A

No

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Q

Is the below gross earnings for NIC purposes?

employment related travel and subsistence costs.

A

No

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Q

Who are relevant employees for class 1 contributions?

A

When the employee is…

Employed in the UK
Aged 16 or over
Has earnings in excess of the earnings threshold (8632 for 19/20)

Q

When are class 1 employee contributions payable unitl?

A

From aged 16 until attaining state pension age

Q

When are class 1 NIC payments due to HMRC?

A

Non electronically - 19th of each month

Electronically - 22nd each month

Q

How much are employers allowed to claim back from their class 1 NIC payments?

A

£3000

Q

When are employees not allowed to claim back their class 1 NIC payments?

A

When the director is the sole employee

Q

When are Class 1A contributions payable by to HMRC

A

19 July following the tax year

or 22nd of July if electronically

Q

What is the small profits threshold for Class 2 NIC?

A

6365