Being self-employed and being employed elsewhere: NI contributions question.

Sinbad

I have been registered as self employed since January this year and I have registered for Class 2 contributions; I’m expecting my income to keep within the Class 2 limit of 8,060.

I am also employed, since May this year. On receiving my first payslip from my employer, I see that I have incurred Class 4 deductions.

A bit of a numpty question but do I have to pay both Class 2 and Class 4 contributions?


Many thanks

Dazed_and_confused

Sinbad wrote: »

I have been registered as self employed since January this year and I have registered for Class 2 contributions; I’m expecting my income to keep within the Class 2 limit of 8,060.

I am also employed, since May this year. On receiving my first payslip from my employer, I see that I have incurred Class 4 deductions.

A bit of a numpty question but do I have to pay both Class 2 and Class 4 contributions?


Many thanks

Yes, depending on your self employed profits you could have to pay both class 2 and class 4 NIC.

You need to speak to your employer though as a matter of urgency as employers should never, as far as I know, deduct class 4 NIC but they should possibly be deducting class 1 NIC.

Its possible you could end up paying class 1, 2 and 4 NIC but it all depends on the amount of your wage and self employed profits

Sinbad

Thanks for the reply Dazed and confused.

I've missed type my original post - my employers are deducting Class 1 contributions, not Class 4.

So my question should have read:
**
I am also employed, since May this year. On receiving my first payslip from my employer, I see that I have incurred Class 1 deductions.

A bit of a numpty question but do I have to pay both Class 2 and Class 1 contributions?
**

So from your reply, I'm reading that I will have to pay both Class 1 (employed) and Class 2 (self-employed) contributions.

Dazed_and_confused

Sinbad wrote: »

Thanks for the reply Dazed and confused.

I've missed type my original post - my employers are deducting Class 1 contributions, not Class 4.

So my question should have read:
**
I am also employed, since May this year. On receiving my first payslip from my employer, I see that I have incurred Class 1 deductions.

A bit of a numpty question but do I have to pay both Class 2 and Class 1 contributions?
**

So from your reply, I'm reading that I will have to pay both Class 1 (employed) and Class 2 (self-employed) contributions.

And class 4 as well.

For 2015:16 tax year,
Class 2 NIC is payable if your profits exceed £5965 (class 2 NIC was £2.80 per week last tax year)
Class 4 NIC is payable if your profits exceed £8060 (class 4 NIC is 9% of the profits above £8060 and then reduces to 2% on profits above £43000)

[Deleted User]

Sinbad wrote: »

Thanks for the reply Dazed and confused.

I've missed type my original post - my employers are deducting Class 1 contributions, not Class 4.

So my question should have read:
**
I am also employed, since May this year. On receiving my first payslip from my employer, I see that I have incurred Class 1 deductions.

A bit of a numpty question but do I have to pay both Class 2 and Class 1 contributions?
**

So from your reply, I'm reading that I will have to pay both Class 1 (employed) and Class 2 (self-employed) contributions.

If, instead of self -employed earnings, your additional income was increased salary you would pay NIC on it at 12%. The fact that you need around £6000 profits before paying anything represents a saving.