Partnerships & NCI

Question 1

Partnership taxation

Answer 1

• profit split per agreement for tax purposes
• when a profit share is set to £nil, the loss is split between the remaining partners profits
• trading losses can claim tax relief on their share

Question 2

Primary Class 1 NIC

Answer 2

• payable by employee
• those aged 16+
• calculated gross before deducting pension
• Employees over working aged don’t pay but employer continues to pay
• multiply by 52/12 for monthly figures

Question 3

Secondary Class 1 NIC

Answer 3

• employer pays
• may deduct £5000 employment allowance per annum for their secondary class 1 NCI liability

Question 4

Class 1A

Answer 4

• BIK generally exempt from primary and secondary
• employee makes this contribution on benefit

Question 5

Class 2

Answer 5

Flat rate weekly contributions

Question 6

Class 3

Answer 6

• Typically used to gain entitlement to pension

Question 7

Class 4

Answer 7

• self employed profit related contributions
• NCI’s payable for tax year are collected along with the income tax liability for that year

Question 8

Annual max contributions

Answer 8

If and employee has more than one employer then there is a max contribution for the year