Which class NIC should I be paying if I have a mix of PAYE and self employment

spikeisland1

I am completing my self assessment tax return online, and have inputted all of my details etc. I understand all of the income tax rules, and how much I should be paying, but I am confused about National Insurance. 
I have earned £10,130 via a mix of multiple PAYE contracts/payslips
 I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735

So thinking of my overall earnings I am only a few pounds over the £12570
Will this result in having to pay Class 4 NIC ?  or is this only in relation to to self employment?
I understand it is optional to pay Class 2, but would probably do so if I will not get charged Class 4...
There was also £10 worth of Class 1 already paid via a payslip 

I am eager to get a better understanding of this, mostly because I have overpaid income tax on my PAYE and so would like to get my return sent soon. Going forwards it is also likely I will do more freelance/self employed work and less PAYE, so would be good to know at what point each Class of NIC gets paid if I have to continue doing a mix of the two types of work. Thanks in advance for any help with this! 

Bookworm225

Understanding is a matter of reading facts for yourself, start here:  
National Insurance: introduction: Overview - GOV.UK

get familiar with the various thresholds, also read the pages linked off this as they have the factual explanations you need to understand the position for yourself without us having to write it all out for you (happy to help with queries, but not basic facts) 
Rates and allowances: National Insurance contributions - GOV.UK


you pay Class 1 NI on your PAYE income, your employer will do that for you. You have no choice in the matter, it is simply tax via PAYE and is payable for each and every job if that particular job's earnings are above the threshold for that week/month depending on the payroll frequency for each job

you state your total employment earnings are 10,130 so it is very probable you have earned enough in the year (from all jobs consolidated) to have been given a "free" full year pension credit on your Class 1 earnings 

please get familiar with your own personal tax record:
Personal tax account: sign in or set up - GOV.UK
It includes being able to check your NI history and thus see if you have any incomplete years where you could, if needed, make up a shortfall by voluntarily paying Class 3 voluntary contributions or, where relevant and possible, choosing to pay Class 2 NI on your SE (your profit is too low to be given the "free" Class 2 credit), and (luckily for you) well below the threshold at which you have to compulsorily pay Class 4 NI on your SE profits.

Jeremy535897

Bookworm225 said:

Understanding is a matter of reading facts for yourself, start here:  
National Insurance: introduction: Overview - GOV.UK

get familiar with the various thresholds, also read the pages linked off this as they have the factual explanations you need to understand the position for yourself without us having to write it all out for you (happy to help with queries, but not basic facts) 
Rates and allowances: National Insurance contributions - GOV.UK


you pay Class 1 NI on your PAYE income, your employer will do that for you. You have no choice in the matter, it is simply tax via PAYE and is payable for each and every job if that particular job's earnings are above the threshold for that week/month depending on the payroll frequency for each job

you state your total employment earnings are 10,130 so it is very probable you have earned enough in the year (from all jobs consolidated) to have been given a "free" full year pension credit on your Class 1 earnings 

please get familiar with your own personal tax record:
Personal tax account: sign in or set up - GOV.UK
It includes being able to check your NI history and thus see if you have any incomplete years where you could, if needed, make up a shortfall by voluntarily paying Class 3 voluntary contributions or, where relevant and possible, choosing to pay Class 2 NI on your SE (your profit is too low to be given the "free" Class 2 credit), and (luckily for you) well below the threshold at which you have to compulsorily pay Class 4 NI on your SE profits.

It is very important that you check your NIC record, as Bookworm says. You should also check your pension forecast. If, for example, you have enough years of contributions that you cannot increase your state pension (the forecast will tell you), there is no point in making voluntary contributions, but if you haven't,  and for some reason your employee (class 1) contributions fall short, volunteer to pay class 2 (£179.40) rather than class 3.

chrisbur

spikeisland1 said:

I have earned £10,130 via a mix of multiple PAYE contracts/payslips

It is possible that you have not paid enough to get cover if these earnings are spread over several employers.
To qualify for being treated as having paid the amount of NI required for a year's cover you need to have been paid 52 times the the lower earnings limit ( or monthly equivalent ) in one of your employments.  The LEL at the moment is £123 a week so have to have been paid £6396.  However earnings that are below the LEL will not count so you may have earnings for the year above £6396 but if some were for weeks when you earned less than the LEL those earnings will not be included.  

So if this applies and you do not have the required number of years you might want to consider the voluntary class 2 NI

Probably not going to affect you but similar applies to earnings above the UEL (upper earnings limit ) anything above this point is not counted towards the figure you need to qualify for that year. 

Bookworm225

you can't pay voluntary Class 2 in tax years where you were not SE in them!

chrisbur

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

Bookworm225

chrisbur said:

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

yes, but as OP appears clueless, I am just clarifying your comment about filling missing years, you cannot fill them with Class 2 if not SE in that year 

Dazed_and_C0nfused

Bookworm225 said:

chrisbur said:

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

yes, but as OP appears clueless, I am just clarifying your comment about filling missing years, you cannot fill them with Class 2 if not SE in that year 

To be fair there are other situations where voluntary Class 2 can be paid, it isn't exclusive to the self employed.

Bookworm225

Dazed_and_C0nfused said:

Bookworm225 said:

chrisbur said:

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

yes, but as OP appears clueless, I am just clarifying your comment about filling missing years, you cannot fill them with Class 2 if not SE in that year 

To be fair there are other situations where voluntary Class 2 can be paid, it isn't exclusive to the self employed.

interesting, what are they please?
Voluntary National Insurance: Check which National Insurance contributions you can pay - GOV.UK

Dazed_and_C0nfused

Bookworm225 said:

Dazed_and_C0nfused said:

Bookworm225 said:

chrisbur said:

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

yes, but as OP appears clueless, I am just clarifying your comment about filling missing years, you cannot fill them with Class 2 if not SE in that year 

To be fair there are other situations where voluntary Class 2 can be paid, it isn't exclusive to the self employed.

interesting, what are they please?
Voluntary National Insurance: Check which National Insurance contributions you can pay - GOV.UK

I believe people who move abroad can pay Class 2 NI (subject to certain criteria).

https://www.gov.uk/guidance/apply-to-pay-voluntary-national-insurance-contributions-when-abroad-cf83#voluntary-national-insurance-contributions

Bookworm225

Dazed_and_C0nfused said:

Bookworm225 said:

Dazed_and_C0nfused said:

Bookworm225 said:

chrisbur said:

Bookworm225 said:

you can't pay voluntary Class 2 in tax years where you were not SE in them!

The OP indicated that they had some self employed earnings
"I have earned £10,130 via a mix of multiple PAYE contracts/payslips
I have also earned £3735 from freelancing, and after I have taken away the £1000 allowance it ends up being £2735"

yes, but as OP appears clueless, I am just clarifying your comment about filling missing years, you cannot fill them with Class 2 if not SE in that year 

To be fair there are other situations where voluntary Class 2 can be paid, it isn't exclusive to the self employed.

interesting, what are they please?
Voluntary National Insurance: Check which National Insurance contributions you can pay - GOV.UK

I believe people who move abroad can pay Class 2 NI (subject to certain criteria).

https://www.gov.uk/guidance/apply-to-pay-voluntary-national-insurance-contributions-when-abroad-cf83#voluntary-national-insurance-contributions

so a single situation where you must a) now be working abroad and b) have paid 3 years of NI contributions in the UK before leaving 

I'll stick with the simple statement to pay voluntary Class 2 you need to be self employed