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Class 4 NI contributions.

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?

Comments

  • 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).
    If it’s not important to you, don’t consume it
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