National Insurance And Further Administrative Matters Flashcards
Class 1 NICS
Payable by?
Due on?
Calculation period?
Employees aged 16-retirement age
Payable on
gross pay
Vouchers for cash/goods/services
Payments in excess of mileage allowance
Calculate in line with payment periods
When should annual limits be used for class 1 NI calculations on earnings?
Earnings accrued evenly over year Or Individual is a director Or Question requires to compare annual positions in a tax planning scenario EG employee vs self-employed
Rates of Class 1 primary NIC? Primary threshold (PT) and Upper earnings limit(UEL) for: Weekly Monthly Annual
Period (PT)12% (UEL)2%
Weekly £184 £967
Monthly £797 £4,189
Annual £9,568 £50,270
Rates of Class 1 secondary NIC? Secondary threshold (ST) for: Weekly Monthly Annual
Period (ST)13.8%
Weekly £170
Monthly £737
Annual £8,840
What are the 2 allowance for Class 1 secondary contributions for those aged 16 to retirement age?
What is the allowance?
Anyone under 21 years old
Apprentices under 25 years old
Allowed a higher upper secondary threshold to allow less NI to be paid by employer
What is the upper secondary threshold (UST) for class 1 secondary NI for anyone under 21 and apprentices under 25?
Period (UST)13.8%
Weekly £967
Monthly £4,189
Annual £50,270
What is the employment allowance?
What companies cannot claim the allowance?
What restriction is applied at high levels of total payable class 1 secondary NI
Rules for connected companies?
£4k per year allowance against total class 1 secondary NI paid by employer
Companies with 1 director and no employees!
Full restriction of allowance against companies with >100k class 1 secondary NICs in previous year
Only 1 connected company can claim.
If total connected companies >100k in previous yr no allowance can be given
What is class 1a NICs?
What %?
They are contributions made by the employer for NON cash benefits given to employees
13.8% on all non cash benefits
Exempt benefits for IT usually exempt for class 1a NICs
What are class 1B NICs?
What is the calculation?
What is a PAYE settlement agreement?
Contributions made by employers on PAYE settlement agreements
13.8% on grossed up value, gross up dependant on tax payer highest band
Employer settles PAYE NIC on certain expenses
What is the apprenticeship Levy?
Who pays the levy?
What is the levy charge?
Annual allowance?
A levy charged on large UK employers to fund new apprenticeships
Employers with annual pay bill >3 million
Levy=0.5% of pay bill
Allowance=15k
What are the types of NIC paid by the self employed?
Class 2 NIC
Class 4 NIC
What are class 2 NICs?
How is it calculated?
What is the small profits threshold?
Weekly NICs paid by self employed
£3.05 per week if traders taxable trading income is over the small profits threshold
Small profits threshold = £6,515
What are class 4 NICs?
How is it calculated?
Class 4 NICs are charged on self employed taxable trading income
Between £9,568 - £50,270 9%
> £50,270 - 2%
How does Class 1 NICs interact with sole traders?
Sole traders can deduct the class 1 NICs payable on employees which will reduce the amount of income tax and class 4 NICs payable on their profits
When are the sled employed tax payments on account and how are they calculated?
When is no POA required?
What taxes are no POAs required?
First payment on account - 31st Jan
Second payment on account - 31st July
POA is based on 50% of previous years tax payable
No POA if:
Tax payable is:
< 1k
20% of total tax liability
Capital gains tax and Class 2 NICs
