National Insurance Contributions Flashcards
What factors determine NICs payable?
Age
Employment status
Level of earnings
Residence status
What are the 4 classes of NICs?
Class 1 - Employed
Class 2 - Self employed (flat rate)
Class 3 - Voluntary (flat rate)
Class 4 - Self employed (percentage rate)
From which employees do employers receive NIC relief?
An employee under 21 and an apprentice under 25.
What is the primary contribution threshold?
£166 per week
What is the lower earnings limit?
£118 per week. Establishes the minimum contribution required to receive benefits e.g. state pension.
What is the upper earnings limit?
£962 per week. This is the maximum amount upon which an employee has to pay the main rate. This is the same limit for which employers of apprentices under 25s ad under 21s receive 0% relief.
List the NIC rates for employees.
Below £166 - 0%
Next £796 (£962-£166) - 12%
Above £962 - 2%
List the NIC rates for employers.
Below £166 - 0%
Above£166 - 13.8%
What is the employer’s allowance?
£3000.
Class 1A contributions are for fringe benefits. What form must be completed and when must payments be made?
P11D. Payment by 22 July.
Which self employed NICs give entitlement to state benefits?
Class 2 only.
When are Class 2 NICs required?
The threshold to begin paying Class 2 NICs is £6365 per year.
What are class 4 NICs?
These NICs are earnings related and set against chargeable income once capital allowances and trading losses have been brought forward.
What are the Class 2 rates?
Weekly flat rate - £3
Maximum payable per year - £156
What are the Class 4 contributions?
Main rate - 9%
Lower annual limit - £8632
Upper annual limit - £50,000
Additional rate (above UAL) - 2%
