Class 4 NI contributions.

Spooky

As I'm self employed I pay Class 2 NI contributions monthly. After completing my tax return online, it then says I need to pay class 4 contributions as well. This is 9% of my profit/living wage, so I have to pay the basic rate of tax at 20% then a further 9% on top. 29% tax. Is this right?

Elaine_Wilson

I'm afraid it is right.

For 2011/12 you pay class 4 NIC on the profit over £7,225.

But don't forget an employee would have paid 12% of his earnings over that amount (as well as the 20% income tax).