£700+ Class 4 NIC charge???

MSD1970

I have just finished my online self assessment form and it has come up that I need to pay over £700 in either Class 4 National Insurance or Student Loan (it isn't specific which is which).

I pay a monthly standing order off my Student loan (and would probably qualify for deferment but want to pay it off)

I have a day job for which my tax and NI are paid by PAYE.

My self employment income is minimal. (I will probably de-register as self employed at the end of this tax year as I no longer earn any money from self employment activity).

For 2010-2011 my turnover was just under £800 with expenses of just over £300 leaving a profit of just under £500.

How on earth could this result in a bill for over £700 in NI?

Anyone any idea?

ceeforcat

It will state tax, Class IV NIC amd S/L due as a total even if none of the latter two are due. Can you post up your gross Paye earnings and tax paid?

MSD1970

Gross £26899.31
Gross for tax £23571.33
Tax paid £3488.40
Reanings for NI £25596
NI paid £1860.81
Pension paid £2063.67

ceeforcat

Ok You appear to have overpaid £70 odd on your PAYE for some reason. However, if you are due to pay S/Loan contributions by way of salary deduction this would amount to £771 leaving a net £700 underpaid. (23571-15000)*9%. What is the correct position regarding your student loan?

Mikeyorks

MSD1970 wrote: »

I pay a monthly standing order off my Student loan (and would probably qualify for deferment but want to pay it off)

Are those voluntary payments or are the direct payments because you're into the last 23 months of paying the loan?

System

You've probably ticked the box indicating you have to pay back a student loan but you didn't enter how much you have paid because the next question specifically asks about deductions made by your employer. If your employer has made deductions at source then they will show on your P60 and you should enter that on the form. Any overpayments you make by direct debit are between you and the Student Loan Company.

MSD1970

That could be it.
My student loan payments are done as a separate direct debit, not through my salary.

I think my monthly salary is just below the student loan threshold so I could probably defer payment again, but I want to be done with it and I don't miss the amount I pay.

I was under the impression that the amount I was paying was the amount they set as when I started paying I paid £50 per month and they reduced it to £26.

I'll have another look see if I can fix it before I submit my return.

Cheers for the help.

System

As the threshold is £15000 to be liable for student loan repayments and your income was £23571.33 then as ceeforcat says I calculate the amount due as £771 which equates to £64.25 per month. What income are the SLC using to calculate your repayments?

Mikeyorks

MSD1970 wrote: »

That could be it.
My student loan payments are done as a separate direct debit, not through my salary.

Did your courses start before 1998? As there's something rather odd otherwise?