NICs

Question 1

Who pays primary Class 1 NICs?

Answer 1

Employees

Question 2

Who pays Class 3 NICs?

Answer 2

Employees and Self-Employed

Question 3

Who pays Secondary Class 1 NICs? What is it based on?

Answer 3

Employers based on employees income

• Just the bog standard NICs that employers pay, it’s the Class 1 A (fringe) and U21s Class 1 that are funky
• Notice the similarity to Primary Class 1

Question 4

Who pays Class 1 A NICs?
What is it based on?

Answer 4

Employers
Fringe benefits

Question 5

Who pays NICs if you are Under 21 or an apprentice under 25?

Answer 5

Employers

Question 6

Who pays Class 2 NICs

Answer 6

Self-Employed

Question 7

Who pays Class 4 NICs?

Answer 7

Self-Employed

Question 8

Name all of the NICs classes which employees potentially pay

Answer 8

Class 1 & Class 3

Question 9

Name all of the NICs classes which employers potentially pay

Answer 9

Secondary Class 1
Class 1 A
Kids 1

Question 10

Name all of the NICs classes which self-employed individuals potentially pay

Answer 10

Class 2, Class 3, & Class 4

Question 11

What are the bands and rates of Class 1 NICs in 22/23? (name the thresholds)

Answer 11

1. 0% up to £11,908 Primary Threshold
2. 13.25% up to £50,270 Upper Earnings Limit
3. 3.25% above £50,270

• You get state benefits entitlement after £6,396 (LEL)
• PT is just £12,570 but in 22/23 it was averaged down because the start of the tax year it was lower. 23/24 onwards its just the same as the income tax bands

Question 12

What are the bands and rates of Class 3 NICs in 22/23? (name the thresholds)

Answer 12

Class 3 NICs are optional, they are just a flat rate fee of £15.85 per week

Question 13

How are Class 3 NICs paid?

Answer 13

Monthly direct debit or quarterly

Question 14

What are the bands and rates of Class 1 A NICs in 22/23? (name the thresholds)

Answer 14

Flat rate of 15.05% based on taxable benefit

Question 15

What are the bands and rates of Secondary Class 1 NICs in 22/23 and who pays it? (name the thresholds)

Answer 15

• 0% up to £9,100 (Secondary Threshold)
• 15.05% thereafter

Employers pay it based on employee salary

Question 16

What are the bands and rates of Kids Class 1 NICs in 22/23? (name the thresholds)

Answer 16

1. 0% up to £50,270
2. 15.05% thereafter
3. Called Upper Profits Limit

Every employer NIC is 15.05% it’s just a question of thresholds, of which there is a maximum of 1

Question 17

What are the bands and rates of Class 2 NICs in 22/23? (name the thresholds)

Answer 17

• 0% up to £6,725 in profits (We are calling the Class 2 Threshold)
• £6,725 thereafter £3.15 per week

Class 2 is flat rate and small amount

Question 18

What are the bands and rates of Class 4 NICs in 22/23? (name the thresholds)

Answer 18

• 0% < £11,908 < 10.25% < £50,270 < 3.25%
• Both “profits limit” (Upper & Lower)

Very similar to Primary Class 1. Difference is it’s 10.25% not 13.25% & that’s all