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Af1 > National Insurance > Flashcards

National Insurance Flashcards

1
Q

What factors determine NIC

A

Employment status
Age
Level of earnings
Residence

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2
Q

Who pays class 1 NIC

A

Enployee and employee

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3
Q

Who pays class 2 NIC

A

Self employed (flat rate)

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4
Q

Who pays class 3 niC

A

Voluntary (flat rate)

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5
Q

Who pays class 4 NIC

A

Self employed (percentage rate)

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6
Q

Are NIC paid on shares acquired under approved share schemes

A

No

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7
Q

Are NIC.paid on shares that can be converted to cash under unapproved schemes

A

Yes

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8
Q

Are NIC calculated before or after tax for an employee

A

Before

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9
Q

Can Employer NIC be deducted from profits for tax purposes

A

Yes

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10
Q

What age are NIC payable until for employees

A

State retirement age

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11
Q

What are NIC based on

A

Pay periods not year

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12
Q

What is the primary contribution threshold

A

£166 per week employees pay class 1 NIC above this level

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13
Q

What is the secondary contribution level

A

£166 per week employers pay class 1 above this level

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14
Q

What is the lower earnings limit

A

£118 per week this is the minimum level of earnings for an employee to be entitled to social security benefits

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15
Q

What is the upper earnings limit

A

£962 per week. Max level of earnings that an employee will pay NOC at the main rate

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16
Q

What is the upper secondary threshold for under 21s/ apprentice upper secondary threshold

A

£963 per week this is the upper limit for 0% employers rate for under 21 and apprentices under 25

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17
Q

What is the employer rate of NIC

A

13.8%

18
Q

What is the main rate of NIC for employees

A

12%

19
Q

What is the additional primary percentage rate

A

2%

20
Q

What is the employer allowance

A

£3000 per year

Deducted from total secondary contributions

21
Q

What is the married women reduced rate

A

Before April 1977 married women could elect to pay a reduced rate of 5.85% on their earnings between £166 and £962

22
Q

When is married women’s reduction revoked

A

Divorce, remarriage, earning less than LEL for 2 consecutive tax years and no self employed earnings

23
Q

Are class 1A nIC charged on fringe benefits for employee

A

No

24
Q

What is the rate of employer class 1 NiC due on fringe benefits

A

13.8%

25
Q

How long will NICO collect NIC for if employee relocated abroad but the employer is UK based

A

52 weeks

26
Q

What pay period is used to calculate company directors NIC

A

Annual earnings period used if paid irregular amounts at irregular intervals.

When earnings are paid the total earnings since start of tax year must be considered

27
Q

What are the special categories of employment

A

Domestic workers, agency workers and lecturers

28
Q

What are the rules for special categories of employment

A

They may not be employed but will be treated as employee for NIC purposes

29
Q

In what circumstances will the nIc record be credited as if contributions have been paid

A

Unemployed claiming certain benefits
On approved training course
Income below pct but above lel
Whilst entitled to certain types of statutory pay

30
Q

When can an employee defer paying class 1 NIC

A

If any of the following apply
The employee pays class 1 NoC with more than 1 employer
The employee earns more than £962 per week from one job over the tax year
The employee earns more than £1128 per week from 2 jobs over the tax year

A reduced rate of 2% will apply to the standard rate instead of normal 12%

31
Q

Can NIC be repaid in event of overpayment

A

No automatic right

32
Q

What is the limit of earnings for a self employed person to be able to choose not to pay class 2 NIC

A

£6365

33
Q

What rate of NiC gives entitlement to contributory state benefits

A

Class 2

34
Q

What is the flat rate for class 2 Nic

A

£3 per week

35
Q

What is the main rate for class 4 Nic

A

9% on earnings between £8632 and £50,000

36
Q

What is the additional rate of class 4 NIC

A

2% on self employed earnings over £50k

37
Q

How are class 2 contributions collected

A

Included I. Self assessment collected on 31st Jan after end of tax year

38
Q

How are class 4 contributions collected

A

Included in self assessment - w payments on account and a balancing payment

39
Q

What is the maximum amount of contributions for class 1 & 2

A

£4964.16

40
Q

What is the maximum amount of contributions for 2& 4

A

£3879.12

41
Q

How long after the tax year to which they relate can class 3 contributions be paid

A

6 years

Af1 (18 decks)

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