National Insurance

averageguy11

Hi

Is there anyone here that trades through a ltd cpy and also as a sole trader? I just wondered how you handled your national insurance.

TIA

fengirl_2

As a sole trader, you pay a flat £2.40 pm class 2 NIC (or around that amount), plus 8% class 4 on your profits over £5425. As an employee of yur own company you pay class 1 at 11% on all earnings over £5425 and the company pays 12.8% on the same earnings.

averageguy11

Do those figures exclude any other income ..as I have a small pension of £1500 (I know I would have to allow this against income tax.

TIA

fengirl_2

You dont pay NIC's on pensions.

averageguy11

Aye i can see that ..although i allow it against my tax code the pension doesn't come in that figure of 5425 u quoted as I guess its not 'earned income'.

Mind me asking where you get the £5425 from as on this link the guy seems to intimate that one should take the full allowance (this tax year) as a 'salary' without any NI ...i've seen that elsewhere too

http://www.ukbusinesslabs.co.uk/forums/money-finances-accounting/953-private-limited-company-advant

fengirl_2

Here are the NIC rates (My figures above may be a bit out as I was replying frm memory):
http://www.hmrc.gov.uk/rates/nic.htm
Am not sure what your link was trying to show . You can earn up to the class 1 limit before paing NIC, of course.