NIC Flashcards
What are Class 1 primary NICs?
Paid by Employees under PAYE system
Employee liable
Payments start on employees 16th birthday and cease on reaching state pension age.
What are class 1 secondary NICs?
Paid by employer on all employees above 16, no upper age limit
Employer liable
How much is the employment allowance?
Employers don’t have to pay the first £5K of secondary class 1 NIC.
Not available to large companies.
What are Class 1A NICs?
Contributions on taxable benefits
Paid by employer at rate of 13.8%
benefits x 13.8%
Due July 22nd following end of tax year
What are class 2 NICs?
Paid by self employed (sole traders and partners)
What is the flat rate of class 2 NICs?
Self employed individual aged between 16 and state pension age pays flat weekly rate of £3.45.
What is the lower profits limit for class 2 NICs?
Nothing paid if individual’s profits are below £12,570
What are class 4 NICs?
Self employed individuals may be liable based on taxable trading profit.
Either 9% or 2%
Paid if over 16 until state pension age reached, ceases after latter reached
What are Class 1 NIC based off?
Employee earnings
IN THE TABLES
Which 2 columns in the tax tables are used for employees?
Weekly and Monthly
When must a newly self-employed individual register as self employed?
31st Jan following the tax year in which self employment commenced
What are the rates for primary class 1 NICs?
See tables
What are the rates for secondary class 1 NICs?
See tables
What should be carefully looked at in all NIC questions?
Age of the taxpayer
What is the employment allowance?
Total secondary class 1 NIC reduced by 5k per year
