Week 5 - Pensions, National Insurance & Administration

Question 1

Difference between pension income and pension contributions

Answer 1

• pension income (income)

- pension contribution (expense)

Question 2

What do you do with pension contributions

Answer 2

1. Pension contribution x 100 / 80

2. Basic/higher rate + pension calculation (same for Scottish tax payers)

Question 3

Class 1 NICs are assessed on a … basis

Answer 3

Annual

Question 4

Class 1 contributions are not payable in respect of …

Answer 4

Medical insurance subscriptions or cars (not convertible to cash) if paid by the company

Question 5

Calculate Class 1 A contribution payable by employer?

Answer 5

(13.8%x(car benefits + fuel benefits for income tax purposes + medical subscription)) payable by employer

Question 6

Calculate class 1 contributions payable

Answer 6

1. Payable by employee - 12% x (upper - lower limit) + 2% (beyond upper limit) x (wage - upper limit)
2. Payable by company in respect of employee - 13.8% x (wage - lower limit)