Seminar 7 Flashcards
NIC’s = ?
national insurance contributions
who pays NIC’s?
self employed people
employers
employees
what are NICs used for?
used by the government to fund state benefits
e.g., jobseekers allowance & state pensions
when do people receive national insurance numbers?
when they turn 16
who pay class 1 NICs?
employees and their employers as a percentage of employee’s earnings
who pay class 1A NICs?
employers on the taxable benefit for employees
who pay class 2 NICs?
self employed people pay a flat rate
who pay class 4 NICs?
self-employed people as a percentage of their taxable profits
who are primary/secondary in the payment of class 1/1A NIC’s?
primary = employees
secondary = employers
how are class 1 contributions paid?
under the PAYE system
how are class 1A contributions paid?
electronically by 22nd July following the tax year to which they relate
how are class 2 contributions paid?
under the self-assessment system
how are class 4 contributions paid?
under the self-assessment system
at what age are employees applicable for class 1 NICs?
between 16 and 66 (state pension age)
employers still pay NICs on employees over 66, but don’t pay NICs on employees under 16
what elements of income are class 1 NICs calculated on?
monetary earnings
e.g., salary, commission, bonuses, vouchers