Class 2 National Insurance

MeOnMonSavExp

I'm being given contradictory info from two sources.

An accountant tells me that someone who pays Class 1 NI on their PAYE, should not be charged Class 2 NI on their self-employed income.

The HRMC says this is not true and that Class 2 NI is payable for self-employed people whatever other contributions they make.

I realize there is an option to reclaim NI on small self-employed incomes should one wish to exercise it - but that is not applicable in this instance.

Is my accountant friend right, out-of-date, or just plain crazy?

WHA

Depends.

There is a maximum, so if you're already paying the maximum class 1, i.e. because your wages are over the ~£42k threshold, then no, you don't need to pay class 2 also. You apply for deferment and then the NIC office review your finances each year and send you a bill if you havn't paid the maximum.

Or, if your self employed profits are below the class 2 exemption threshold of ~£6k you can apply for exemption.

But if neither of these apply, then your accountant is talking rubbish.

MeOnMonSavExp

Thanks for that.

The low income to the self-employed income doesn't apply.

The PAYE income is £32,000 - so below the £42,000. However, this is on a part-time contract (3.5 days a week). Does that make any difference?

purdyoaten

MeOnMonSavExp wrote: »

Thanks for that.

The low income to the self-employed income doesn't apply.

The PAYE income is £32,000 - so below the £42,000. However, this is on a part-time contract (3.5 days a week). Does that make any difference?

It does not.