Who pays NI contributions?

KG

I work in 2 low-hour part-time jobs and am trying to set up my own business (well - businesses actually - one jewellery making and the other website contracting).

One job has such few hours that I don't pay NI on my paycheque, nor does my employer appear to pay an employer contribution.

For the other job I have some NI deducted from my salary and the employer makes a contribution too.

My question is - will I have to pay both employer and employee NI on both of my own businesses? And does it make sense to treat it as one business even though it's doing 2 different things?

Not trying to scam the tax office, I just can't get my head round it.

KG

fengirl_2

You will be running two businesses, you cannot combine the two as they are completely different trades. You will be liable to pay class 2 NIC's of about £5pm as a self employed person. In addition, you will be liable to class 4 NIC's at 8% if your total profits exceed about £5500 a year.
Employers NIC is only paid by employers and employees NIC by employees. If you continue to be employed whicle you run the businesses, you will continue to pay class 1 NIC's on your wages as class 1 comes above all the others.

KG

Thanks Fengirl.

When you say 'total profits' I am guessing that's for both businesses - i.e. I don't get the £5,500 allowance for both sides?

KG

fengirl_2

Correct, both businesses together. Although if you have two employers, you get two lots of class 1 exemptions!

LittleVoice

KG wrote: »

My question is - will I have to pay both employer and employee NI on both of my own businesses? And does it make sense to treat it as one business even though it's doing 2 different things?

When you wrote of setting up two businesses, did you mean two companies or are you really thinking of being self-employed but with two income streams?

If you are self-employed, there is no employers or employee NI to be paid - but you would be liable for self-employed contributions.

If there are two separate companies and you are an employee of those businesses, then employer/employee contributions would be payable (if sufficient income).