Class 4 NI - The Book-keepers Forum (UK)

Zak · Member

Class 4 NI

Helz · Senior Member

Hi Zak

Yup, class 4 NI contributions for this tax year (2011/12) are 9% on the taxable profits from £7225 to £42475, and 2% on anything over £42475.

This link www.hmrc.gov.uk/rates/nic.htm will take you the NI rates - although I guess that's probably where you've been looking!

HTH

Helen

Zak · Member

Thanks Helen

Does that mean if the first £7225 is exempt, and its only 9% on the money you make after that ie

If you make 8225 in profits NI class 4 would be £90- or would that be £740,25?

Helz · Senior Member

Yes, the first £7225 is exempt, so in your example the class 4 NI would be £90.

Helen

Zak · Member

One other question. If you are set up as a sole trader as well as having income from other employment, are your earnings from that employment taken into account in this respect, or ids it only the 7225 that comes from the business?

Thanks Again
Steve

semsley · Guru

Steve

It's only the 7225 from the business on which class 4 is paid. Any NI from an employed job will be taken at source from that other income.

Sheila

YLB-HO · Guru

If your client has income from other employment, they can notify the HMRC by completing a CA72B Application for deferment of payment of Class 2 and/or Class 4 National Insurance contributions. This allows deferrment of the the self-employed contributions until after your client knows the actual amount of NIC due against the selfemployment. It just makes sure your client does not overpay as it is very difficult to get it back if it was not due.

I must admit over the years I have had lots of clients who have applied for and been given the deferment. It can be years before the HMRC get round to asking for the NIC due!