National Insurance and further administrative matters Flashcards
Who pays class 1 primary NIC?
All employees from 16 to state retirement age
- Stop paying after retirement
How pays class 1 secondary NIC?
EMPLOYERS must for everyone over the age of 16
What is the employment allowance?
£4000
- Not available if the director is the sole employee
- Not available is total class 1 secondary liabilities > £100,000 (applies to connected companies)
When are NIC paid by the employer?
1) The 19th of July following the tax year concerned
2) If electronic payment, the deadline is extended to the 22nd of July (Use this in exam)
What are class 1A NICs?
Payable by the employer on non-cash benefits
-13.8% flat rate (No 0%)
What are class 1B contributions?
If a PAYE settlement agreement has been made, employers will pay class 1B NICs on certain benefits / expenses in relation to the employee
13.8% flat rate (No 0%)
What are the two NICs payable by the self employed?
1) Class 2 NIC
- Payable at £3.05 per week if a traders taxable trading income is over the small profit threshold of £6,457
2) Class 4 NIC
- Payable at 9% on taxable trading income between £9,500 and £50,000
- 2% thereafter
When do individuals not need to make payments on account?
if amount paid in previous tax year was less than:
1) £1000
2) 20% of total tax liability
When are the two Payments on account for self employed?
1) First - 31st Jan in the tax year
2) Second - 31st July following YE
Each POA is calculated based on 50% of the previous year’s tax payable
3) A balancing payment is due by 31st of January following the end of the tax year
